Cable’s Role in ’92 Games Undecided

There is debate about whether the price will rise. The Fox television network may join ABC, CBS and NBC in the competition. But the biggest question as bidding nears on U.S. television rights to the 1992 Summer Olympics is what role cable will play.

With memories of NBC’s financially disappointing 1988 Summer Olympics show still fresh in many minds, Olympics officials for the first time are actively pushing for cable to get a piece of the action for the Barcelona Games.

Their hope is to keep the overall rights fee up by encouraging the winning network to defray its costs via cable sales. NBC paid $300 million to televise the Games in Seoul, South Korea, but drew lower ratings than it had anticipated and wound up making a small profit only because of the extra revenues generated by the TV stations it owns.

The International Olympic Committee is still auctioning off only one package, however. As with past Olympics, all U.S. television rights--broadcast, cable, pay cable--will go to one network, with that network then allowed to sell part of the package to other outlets--though none has chosen to do so before.

In preparing draft contracts that were sent to the networks for inspection and comment, a variety of options for parceling the rights were considered, and network concerns on such matters as the quality of cable-produced events were addressed, said Richard Pound, vice president of the International Olympics Committee and chairman of its television negotiations committee.

“We listened for a while, and finally said, ‘OK, we’ll throw in everything (in the rights package)--but it’s got to be understood that we’re expecting to see some cable,’ ” he said in a telephone interview from Montreal.

Despite NBC’s recent experience, top Olympics officials think the winning 1992 bidder will offer, as one put it, a “significantly higher figure” than $300 million. Bids probably will be accepted on or about Dec. 1, Pound said, with the winner to be announced soon thereafter.

Reasons cited for this optimism include the fact that the Games from Spain, unlike NBC’s late September-October sports fest, will be back in the summer--running from July 25 to Aug. 6, 1992.

As Olympics theory goes, this will be good for ratings. Families will be together, not returning from vacation to schools and jobs, and viewers won’t be distracted by late-season baseball races and new fall TV programming.

But there are those who scoff at such Olympian optimism, among them retired NBC board chairman Julian Goodman.

“Wouldn’t you say that if you were in their place?” he asked. “They can’t say, ‘It was terrible and we’ll probably get less this time.’ They’ve got to talk it up.”

(Goodman takes a dour view of the whole process of Olympics bidding. He has proposed that America’s broadcasting and cable industries form--with federal approval--a nonprofit corporation to make a single bid for Olympics rights, then divide them. His suggestion hasn’t been adopted.)

With the bidding about to begin, the presidents of the sports divisions at CBS, NBC and ABC are playing things close to the vest, lest a slip of the lip sink their respective strategies.

ABC’s Dennis Swanson, whose network paid the all-time record of $309 million for this year’s Winter Olympics, declined to be interviewed.

So did NBC’s Arthur Watson. A spokesman for him said NBC will be “a serious bidder,” although “we wouldn’t take it at a ridiculous amount of money just for the sake of having it.”

CBS’ Neal Pilson, whose company last May paid $243 million for rights to its second-ever Olympics show, the 1992 Winter Games in Albertville, France, was readily accessible for a brief phone interview. But he declined to say if he thought the winning price for the Summer Games in 1992 will be higher than for those of 1988. Nor would he comment on what impact the ratings that NBC got for the Seoul Games may have on the bidding for Barcelona.

The idea of sharing the Olympics costs has become increasingly appealing to the major networks as their audience shares continue declining because of sharp inroads of independent stations and the growth of cable TV.

NBC considered selling some “lesser events” from Seoul to cable TV, but quickly dropped the idea after strong objections from its affiliated stations. CBS has not ruled out the idea for its 1992 Winter Games.

One network source said CBS has gotten inquiries about selling some of those events to basic cable, pay cable and pay-per-view cable services, with Home Box Office and Turner Broadcasting among the inquirers.

“There is plenty of interest from cable,” said CBS spokesman George Schweitzer, declining to say who is interested. “But no decision (on cable sales) has been made yet.”

CBS has no cable operations, nor does it plan any, it says. But its rivals are active: ABC owns 80% of all-sports ESPN, while NBC in February will launch a business-and-sports cable service, CNBC.

Heavy criticism followed the heavy load of commercials on NBC’s Summer Games this year. Indeed, some observers thought the commercial barrage contributed to audience turnoffs that left NBC’s prime-time Olympics ratings 16.6% below what the network had guaranteed advertisers.

But there is nothing in the proposed Barcelona network contract that would limit the number of commercials during the Games, Pound said.

“No, that’s a network decision,” he explained. “They have to decide. If they put too much in and they get lower ratings, then that’s the price they have to pay.”