NBC Now Reports the Network Lost Money on Olympics

The NBC television network, which last week said it would turn a profit from its Olympic telecasts despite lower-than-expected ratings, reversed itself Tuesday and said it lost money on them.

The admission, made two days after the Summer Games in South Korea ended, included a qualifier: The six TV stations that NBC owns, including KNBC Channel 4 in Los Angeles, posted what a spokesman said was “a small profit” on the Games.

Thus, while the NBC network “lost money on the Olympics,” its parent company “will realize a modest profit on the Olympics” because of revenues brought in by its six stations, said the spokesman, Joe Rutledge.

Rutledge had no estimate of how much that profit would be. One network source pegged it at $10 million or less, rather than the more than $40 million that NBC had hoped to reap from its Olympic telecasts.

NBC’s admission means that both the Winter and Summer Olympics lost money for their U.S. networks this year. ABC reportedly lost $65 million on its Winter Games from Calgary, Canada, for which it had paid a record $309 million.

Ratings released Tuesday by the A.C. Nielsen Co. showed NBC’s Olympic coverage at the top of the chart for the second week in a row, but the placement was less significant than the raw ratings numbers. The network, which charged advertisers up to $330,000 for a 30-second slot in prime time, had guaranteed them an average prime-time rating of 21.2; the result fell well below that.

For the 15 days of actual Olympic competition--Sept. 17 through Oct. 1--NBC’s prime-time average was 16.6% below the guarantee. For the full 18 days, including a preview and the opening and closing ceremonies, it was even lower--18.4% below the guarantee.

Including the preview show, NBC’s average prime-time ratings for the Olympics through Sunday night was 17.3. With each ratings point worth 904,000 households, that represents more than 15.6 million homes each night.

But that was about 4.4 million fewer homes than tuned in for ABC’s money-making Summer Olympics in Los Angeles in 1984, the rights for which cost ABC $225 million.

NBC’s lower ratings, blamed on such factors as the 14-hour time difference between Seoul and the United States and the later-than-usual start of the Summer Games, forced NBC early on to give sponsors “make-goods”--free time elsewhere in the Games or later this fall.

NBC’s projected Olympic profits also apparently suffered from NBC’s sudden decision last month to join ABC and CBS in a live telecast of the Sept. 25 presidential debate between Vice President George Bush and Massachusetts Gov. Michael Dukakis.

NBC initially had said it wouldn’t preempt its Olympic show that night for live debate coverage, which carried no commercial advertising.

When NBC President Robert C. Wright opted to air the debate live, NBC News President Michael G. Gartner estimated that it could cost NBC $8 million in potential Olympic advertising revenue.

“I think it came out to a lot more than that,” said one NBC official who asked not to be identified. He had no immediate estimate of how much more, but said that the debate on a Sunday night came at a time of night when NBC “probably would have had our biggest ratings” for the Olympics.

That this year’s Summer Games started in mid-September was “without question” a factor in their garnering lower ratings than ABC got in 1984, said Robert Blackmore, NBC senior vice president for sales.

ABC’s Olympics aired in late July and early August and got an additional boost because of the boycott by the Soviet Union, which resulted in a high proportion of American winners (83 gold medals).

“The fact is, Americans have their seasons,” Blackmore said, and the later-than-usual start of the Seoul Games had NBC competing for viewer attention with the end of the baseball season and the start of the football season, and the end of summer vacations and the resumption of school and work for millions. South Korea had moved the dates back to avoid summer monsoons, he said.

As for the 1992 Olympics, CBS already has won rights to the 1992 Winter Games in Albertville, France, for $243 million, and says it expects to make a profit from them. Bidding for U.S. broadcast rights to the Summer Games in Barcelona, Spain, will be held next month.

The lower-than-expected ratings for NBC’s Summer Olympics “might affect the bidding” for the Barcelona Games, said one broadcast analyst on Wall Street, Edward Atori of Smith Barney Harris Upham.

But those ratings shouldn’t put a major dent in NBC’s earnings for 1988, thanks to the profits its six owned-and-operated stations earned, he said. He estimated that NBC will earn $250 million this year.