1988 Seoul Olympic TV Rights Could Cost $500 Million

At a lakeside hotel in Lausanne, Switzerland, the world’s most expensive poker game will begin today.

Officials from the International Olympic Committee (IOC) and the Seoul Olympic Organizing Committee will meet with representatives from the United States’ three major television networks to determine which will have the rights to the 1988 Summer Olympics.

Speculation is that the winning network will have to bid $500 million, more than twice the $225 million that ABC paid to televise the Los Angeles Summer Games.

Industry insiders have made NBC the favorite, a distinction that NBC officials flatly reject.

“Who makes us the favorite?” asked Arthur Watson, president of NBC sports.

Well, industry insiders.

Watson contends that ABC, which has televised 9 of the last 12 Olympics, is the favorite.

Industry insiders do not take CBS’ interest in the Seoul Olympics seriously, which CBS officials say is a mistake.

Industry insiders either know nothing or too much.

One thing everyone agrees upon is that all three networks perked up when the organizing committee announced the Seoul Athletic Timetable, a schedule assuring that many of the finals in the most attractive sports for Americans--track and field, swimming, basketball, gymnastics and boxing--will be held during television’s prime-time hours in the United States.

The schedule was the primary concern for the networks, who could not help but notice ABC’s difficulty in attracting viewers to the 1984 Winter Olympics. They blamed that, to a large extent, on the six-hour time difference between Sarajevo, Yugoslavia, and the Eastern time zone. Americans are not turned on by watching an event if they already know the outcome. As a result, neither are their televisions.

There is a 13-hour difference between Seoul, South Korea, and New York.

If the organizing committee had adopted a more traditional schedule for the Games, many of the finals would have occurred during the early-morning hours in the United States. An 8 p.m. final in Seoul would have begun at 7 a.m. in New York and 4 a.m. in Los Angeles.

Instead, the committee has scheduled many of the finals between 9 a.m. and 2 p.m., Seoul time, placing them between 8 p.m. and 1 a.m. in New York, and 5 p.m. and 10 p.m. in Los Angeles.

Despite what the song says, money makes the world go ‘round.

Refusing to join the chorus initially were officials from various sports federations, who said that beginning finals in the morning and early-afternoon hours would be bad for the athletes.

“We don’t feel we could compromise our sport and our athletes to oblige television,” Michael Jacki, the executive director of the U.S. Gymnastics Federation, told the Asian Wall Street Journal in June. He said gymnasts need at least five hours before a competition for light exercise, meals, heavier exercise, rest and heavy warm-ups.

A few weeks later, the gymnasts agreed to move 12 of their 15 finals from evening to noon.

The last to capitulate was the International Amateur Athletic Federation, the governing body for track and field.

Even when its officials capitulated, they were reluctant to admit it.

At a meeting of the IAAF Council July 14 in Athens, Greece, IAAF President Primo Nebiolo of Italy announced that only the women’s marathon and men’s 50-kilometer walk would be held during the morning. He said the IAAF’s sole interest was the athletes.

Television be damned, he appeared to be saying.

Americans, too.

Using the 200 meters as an example, he said that the final would start at 3:45 p.m. (2:45 a.m. in New York).

“We watched the Los Angeles Olympics at 1, 2 or 3 o’clock in the morning in Europe,” he said. “Why shouldn’t the Americans?”

The rhetoric was hard-line.

The reality was something else.

Not until later was it revealed that the IAAF also had agreed that the finals of the 100, 400, 800, 1,500 and 5,000 meters, as well as all of the field events, would be held between noon and 2 p.m.

In all, 21 of the final 42 track and field finals will occur before 2 p.m.

At one point, the organizing committee’s negotiator, Barry Frank of the International Management Group, predicted that the Seoul Olympics would attract a network bid of $1 billion.

He later revised his estimate to $750 million.

But until the timetable was announced, network officials estimated that the figure would be between $300 million and $350 million.

Now, obviously pleased with the schedule, the networks call $400 million a reasonable figure.

South Korea’s sports minister, Dr. Lee Yong Ho, said this week that the committee will not negotiate below a certain amount, believed to be $600 million.

Speculation is they will settle on a figure somewhere between $400 million and $600 million.

Even with a timetable tailored to their needs, the networks still have concerns about televising the Games from Seoul.

Considering that many Eastern Bloc countries, including the Soviet Union, do not have formal diplomatic relations with South Korea, there is the possibility of another boycott, although it appears unlikely at this point that one would be widespread. Many Eastern Bloc countries, East Germany in particular, joined the Soviet Union in the 1984 boycott, but did so reluctantly.

There also are concerns about South Korea’s tenuous peace with North Korea and the potential for internal turmoil that could accompany South Korea’s presidential transition in 1988.

Even so, the networks are on the verge of breaking the Olympic record.

The old record was short-lived, ABC having earned the rights last January to the 1988 Winter Olympics in Calgary with a bid of $309 million. The last time the Olympics were in Canada, ABC paid $25 million to televise the 1976 Montreal Summer Olympics.

Why are the networks willing to pay so much?

Prestige is one factor. Another is that the networks can use the Olympics as a forum to promote their fall shows. In 1988, the new season will begin the day after closing ceremonies.

But the bottom line is, well, the bottom line.

ABC spent $225 million for the rights to the Los Angeles Olympics, a bargain considering the Games generated $435 million in advertising revenues for the network.

Considering that, ABC would figure to be the strongest contender for the 1988 Summer Games.

There also is ABC’s Olympic tradition to consider.

“They always find a way to get the Olympics,” an NBC official said. Industry insiders point out, however, that ABC is being taken over by Capital Cities Communications, Inc., which has a history of belt-tightening. It is careful about the number of zeroes it puts after dollar signs.

On the other hand, industry insiders say that ABC’s bid for the 1988 Winter Games was too high and that the network may lose as much as $50 million in Calgary. One method of compensating would be to win the rights to the Summer Games and then offer both Olympics to advertisers in package deals.

Also, ABC would have lower production costs than the other networks because it already would have the equipment and personnel from the Winter Olympics. Another factor in ABC’s favor is that it can offer more hours of programming, thus generating more advertising revenue, because it owns ESPN.

Most significantly, ABC needs the Olympics more than the other networks because of its last-place standing in the prime-time ratings. The Olympics are a quick fix.

Needing the Olympics the least is CBS, which is No. 1 in the prime-time ratings.

As one CBS official said, “The engine that pulls the train here is not sports but entertainment.”

There also is a significant amount of belt-tightening at CBS because of the cost involved in fighting Ted Turner’s takeover bid.

CBS was the first network to drop out of the Calgary bidding, making a final offer of $270 million. Industry insiders say that CBS entered the bidding only to prevent one of the other networks from stealing it.

“We’re interested in Seoul, but only at a reasonable price,” said Neil Pilson, executive vice president of the CBS broadcast group.

That leaves NBC, which appears to be the favorite primarily because ABC is not.

Most of this is speculation because, as one NBC official said, the networks’ approach to the bidding is “the best-kept secret in television.”

One thing upon which the networks agreed is that they do not want to be involved in the same type of bidding that drove the price up for the Calgary Olympics.

That also was a Barry Frank production.

He assigned each of the networks a room at the Palace Hotel in Lausanne and asked them to submit opening bids. He then informed each that its bid was unacceptable. Without telling them the amounts of their competitors’ bids, he requested new offers. This continued until CBS and NBC had withdrawn, NBC at $304 million.

ABC’s winning bid of $309 million was almost $60 million more than Frank expected.

“We weren’t even told when CBS had dropped out,” said Jim Spence, senior vice president of ABC sports.

“It left us with a bitter taste in our mouths,” he said. “When you make a deal with someone, the idea is that all parties will be happy. That was not the case with our Calgary deal.”

As a result, the IOC has agreed to be the referee in today’s bidding.

Canadian Richard Pound, chairman of the IOC’s television committee, said each network will make its presentation separately, after which the lowest bidder will be eliminated. Discussions then will continue with the two others.

Frank has suggested that the Seoul organizing committee will negotiate with cable companies if bids from the networks are not considered high enough, but IOC officials have rejected that idea.

“We have a responsibility to insure the best and widest coverage for the Games,” one IOC official told the Associated Press. He said a cable company bid would be rejected “even if it offered five times what the big networks feel they can afford.”

Times staff writer Larry Stewart contributed to this story.