NBC Gets Rights to 1992 Olympics for $401 Million

Setting an Olympic record, NBC agreed Thursday to pay $401 million for U.S. television rights to the 1992 Summer Games at Barcelona, Spain--$101 million more than it spent for this year’s Olympics at Seoul.

The network immediately said that cable television will, for the first time, get a piece of the action, though specific plans for how it will sell some of its rights were not disclosed.

And in a move that may draw cheers from viewers who criticized NBC’s heavy barrage of commercials during its Seoul telecasts, the head of NBC vowed that the network won’t go so much for the commercial gold in 1992.

There probably will be fewer prime-time commercials in the 1992 Games, NBC President Robert C. Wright said at a news conference after the network’s winning bid was announced by officials of the International Olympic Committee.

“I think we reached our (commercial) peak in Seoul and we would like to find a way to creatively reduce the commercial load going into Barcelona,” he said. “That’s certainly an objective we have.”

Selling rights to some events to cable would be one way of reducing NBC’s costs and the need to sell additional advertising time. Even with the amount it sold for the 1988 Games, NBC wound up losing money, at least on the network level. NBC officials said the company made a modest profit--about $10 million--because of ad revenues for the Games from the six stations it owns, including KNBC-TV, Channel 4, in Burbank.

Although Wright did not say that the NBC television network would end up in the red again in 1992, he came close to it.

“We didn’t go into this to lose money,” he said, but added, “This is not designed to earn us a lot of money.”

The Olympic telecasts, he said, have other things going for them, such as good will, “that will have future benefits to NBC.”

NBC was chosen after a two-stage bidding process in which the final offers “were all very close,” according to Richard Pound of Canada, vice president of the IOC and chairman of its television negotiations committee.

“I think they all wanted this event and they all gave it their best shot,” he said.

He declined to say what the offers of ABC and CBS had been. Dennis Swanson, president of ABC sports, and Neil Pilson, president of CBS sports, also declined to reveal their bids, though Pilson, in a statement attributed to him by a spokesman, said CBS’ final bid “was substantially less than the $401 million” paid by NBC.

Sources close to the negotiations pegged CBS’ offer at between $350 million and $360 million.

CBS earlier this year paid $243 million for rights to the 1992 Winter Olympics at Albertville, France. It had hoped to land Barcelona for what would have been an Olympic double bill, its first. Laurence A. Tisch, president of CBS, Inc., has said CBS expects to make money on its telecasts of the 1992 Winter Games.

ABC, which dropped out of the bidding for the 1992 Winter Olympics after complaining about bidding procedures, held the previous Olympic price record--$309 for this year’s Winter Games in Calgary, Canada.

There was an ironic note to NBC’s purchase. When CBS bought the 1992 Winter Games, Arthur Watson, president of NBC sports, criticized CBS’ winning bid of $243 million--39% more than NBC offered--as excessive.

Still, before Thursday, there had been speculation that the bidding was going to be so fierce for the Barcelona Games that the American rights could go for as much as $430 million.

Part of the reasoning for this was that the Games from Spain, unlike NBC’s late September-October sportsfest from Seoul, will be back in the summer, from July 25 to Aug. 6, and thus will not be facing an audience whose attention is divided by presidential debates, baseball playoffs, football games and thoughts of returning from vacation to school and work.

But there also was a theory that events proved wrong: that the ratings NBC got for its Summer Games from South Korea--16.6% below what NBC had guaranteed advertisers--might keep the price down.

Under the agreement reached Thursday and in previous ones, the winning network buys the entire Olympic broadcast package for the United States, and then can sell part of it to cable.

No such cable resale has yet occurred, primarily because of objections from network affiliates. NBC was considering such a deal this fall but quickly dropped the idea after its affiliates griped.

CBS hasn’t yet decided if it will sell part of its Winter Olympics to cable. Wright and Watson said NBC has a cable plan for its 1992 Summer Games but declined to be more specific.