Eye on the Olympics : Media: CBS is taking a more sober-minded approach to covering the Winter Games that start this week. For the first time, the network is sharing coverage with a cable channel.

Like the gilded chariot races that roared on through the long, slow fall of the Roman Empire, one of network television’s most overwrought--but endangered--spectacles unfolds this week in America’s living rooms.

The 1992 Winter Olympics in Albertville, France, begin a 116-hour marathon on CBS. And while the Games may reap CBS promotional glory, they nonetheless are likely to at best break even for the network.

CBS paid a total of $543 million for the broadcast rights to both the 1992 Games and the 1994 Winter Olympics in Lillehammer, Norway. (Beginning in 1994, the Summer and Winter Olympics will alternate every two years.) But after more than 30 years of paying escalating rights fees to host cities and the International Olympic Committee, the Olympics have become a financial albatross for the networks.

Through the 1970s and ‘80s, the networks--with their unchallenged reach into every home in the country--could afford to spend whatever it took to cover the Olympics, both winter and summer. And advertisers, with nowhere else to go, were willing to pony up whatever ad rates were demanded.

The money gushing in transported planeloads of sponsors, securities analysts and network employees to instant cities set up in remote corners of the globe.

By contrast, the Olympics of the 1990s will be much more sober affairs. The broadcast networks no longer maintain their stranglehold on the viewer. They cannot afford to mount the Games with the extravagance they once considered a necessity.

In many ways, the Albertville Olympics are the beginning of the end of an era. CBS is sharing coverage with Ted Turner’s TNT cable network. And in Barcelona this summer, NBC will disperse the coverage even further, offering 1,000 hours of programming on pay-per-view.

Under NBC’s novel plan, viewers will be able to choose one of three packages costing up to $170. The network is spending at least $60 million on pay-per-view production and another $40 million on marketing and promotion.

NBC officials had originally projected that they would sign up at least 4 million of the estimated 20 million TV households that will have pay-per-view capability by this summer for its “Olympics Triplecast.” The project is being closely watched as the most crucial test yet of the nascent pay-per-view business.

So far, early results are not wholly encouraging. Only 100,000 customers signed up during an intense, monthlong media blitz before Christmas. NBC officials caution that pay-per-view is largely an “impulse buy,” meaning that viewers don’t order the event until the last moment.

For now, NBC President Robert C. Wright says the network is “very happy” with awareness levels about the network’s pay-per-view plans. But by April, Wright predicts--when the Summer Olympics are just two months away--”our knuckles are going to get very white.”

Still, the level of fragmentation, change and uncertainty reflected in NBC’s plans for Barcelona will only compound in the future.

“We’ve seen the last of the big, over-the-air broadcast networks buying all the rights and selling off pieces of it here and there,” says Peter Lund, executive vice president of CBS. “In the future, coverage will be more equally split between broadcast and cable.”

By the 1996 Summer Olympics in Atlanta, even more unusual relationships could evolve.

Television executives speculate that giant Atlanta-based companies such as Coca-Cola or Turner Broadcasting could acquire the rights and sell off parts to the networks. Or they could syndicate portions to an ad-hoc network of stations. Both companies are said to be weighing such possibilities.

In any event, television executives scoff at the expectations of William Payne, president of the Atlanta Organizing Committee, who has said he hopes to get $600 million for the U.S. broadcast rights.

CBS and NBC, in the meantime, must take their lumps and keep losses to a minimum.

But this week, given the pressures on CBS to produce a first-rate broadcast--it hasn’t covered the Games since they were held in Squaw Valley, Calif., in 1960--that will be an Olympian feat.

“The Olympics have become very expensive habits,” observes Don Ohlmeyer, a producer of five previous Olympics. “That’s because the networks have been bidding with their egos instead of their brains.”

Those egos were on display less than 12 weeks after ABC lost $65 million on the 1988 Winter Olympics in Calgary. That’s when CBS officials hoisted champagne glasses at a New York press conference to toast the network’s winning $243-million bid for the 1992 Winter Games.

The then-No. 3 network desperately needed a morale booster. CBS Inc. Chairman Laurence Tisch, sitting on $3 billion in cash after a year of auctioning off parts of the company, was eager to make a make a big gambit and acquire a prestige event for the network.

While NBC termed the amount “shocking”--and ABC dropped out, claiming that it didn’t want to be drawn into a bidding war--CBS executives were jubilant, confidently assuring that they would earn a tidy profit. Tisch called it “a perfect bid.”

A lot has changed since then.

The networks have continued to lose viewers to cable and independent stations, while advertising revenue has leveled off and even declined. Lund admits that, based on what CBS knows today, it would not have submitted such a high bid--though CBS is paying $68 million less than ABC did for Calgary four years earlier.

“The marketplace has changed,” Lund says. “Obviously, would we have known about the economic downturn in the general and broadcast economy, we’d have bid a lot less for our sports franchises.”

CBS is heading into its Olympics coverage after a disastrous experience with the costly deals it made with the National Football League and Major League Baseball. Last year, CBS took a $322-million pretax charge on sports events.

So, in an era of diminished resources for broadcasters, CBS is tempering the spend-it-all philosophy that propelled ABC through its glitzy Olympic coverage of the 1970s and ‘80s.

At the Calgary Olympics four years ago, ABC fielded a work force of 1,200 and spent $100 million for coverage. But the bean counters at CBS have managed this time to cut the on-site work force to 800 and slash the production budget to $70 million.

The network is projecting “modest” losses if ratings achieve a relatively low 17% in prime time. But, predicts Lund, “I think we’ll surpass that.” If ratings drop below 17%, then CBS will have to provide free commercial time--called “make goods”--to advertisers, as did ABC and NBC during the 1988 Winter and Summer Olympics.

Unfortunately, should ratings do better than guaranteed, CBS cannot charge more until it begins selling advertising for the 1994 Winter Olympics. About half the sponsors for Albertville have committed to make inflation-adjusted ad buys for the Lillehammer games.

Meanwhile, CBS--despite selling $345-million worth of advertising for Albertville--is still $25 million to $30 million short of its target only days away from the Feb. 8 start date. A 30-second commercial in prime time during the Olympics is running about $280,000, slightly below the $300,000 rate that ABC commanded in 1988.

“We are in a much softer economy today than ABC was with Calgary,” notes Paul Schulman, who heads his own media buying service in New York. “Many of the dollars earmarked for the Olympics this time are coming out of regular ad budgets, not budgets set aside for the Games as in the past.”

The lower-than-expected advertising revenue has forced CBS to scrimp on non-essential aspects of its coverage. At the CBS broadcast center in Moutiers, the walls have gone unpainted and the floors uncarpeted. CBS saved $1 million by requiring employees to fly coach rather than first class. In all, the network cut its Olympic budget twice over the last three years.

“You have to make a choice about spending money on facilities or directing it toward the screen,” explains Mark Harrington, the former CBS News executive in charge of the network’s Olympic coverage. “It’s driven by the changes that have taken place in this industry.”

Among those changes: Viewership to competing cable channels has soared. Network advertising revenue has gone flat, setting off a scramble for particularly scarce sports ad dollars. And the Fox network, which is planning an aggressive counter-programming strategy during the Olympics, continues to siphon off viewers.

(Fox, which counter-programmed the Super Bowl on CBS last week by scheduling a live halftime showing of “In Living Color,” plans to air a week of summer-themed programs during the Winter Olympics under the title “Fox Summer Games.”)

Still, CBS officials contend that what viewers see on the screen will not be affected.

“We have state-of-the-art equipment in areas we need to have it,” Harrington says. “You ask people to do more and work harder. There is strain involved, not unlike other areas of TV today.”

Whenever someone questions the wisdom of mounting--and risking--costly Olympics coverage when the financial rewards are break even at best, network officials are quick to explain that the two weeks of events provide ample opportunity to promote the network’s news anchors, correspondents and sports commentators.

However, as past big-ticket sports events on the networks demonstrate, such trumpeted value can be fleeting.

TV sports producer Michael Weissman knows firsthand how ephemeral the Olympics can be for the networks.

Weissman, NBC’s top producer for the 1988 Summer Olympics, remembers the blank stare he got after excitedly telling a friend that he had just wrapped up two weeks of producing Olympic coverage in Seoul.

“His comment was, ‘Really? NBC did that?’ . . . It’s not an automatic (that) by having the Olympics there’s going to be a lot of positive spinoff for the network. From a promotional point of view, you walk a delicate line.”

The Winter Games on TV The Winter Olympics proved increasingly costly for the major broadcast networks through the 1970s and 1980s. This year, despite lower rights fees and production costs for the upcoming Albertville games, CBS at best will break even on the event.

Rights fees fell this year. . . 1972 Sapporo (NBC): $6.4 million 1976 Innsbruck (ABC): $10 million 1980 Lake Placid (ABC): $15.5 million 1984 Sarajevo (ABC): $91.5 million 1988 Calgary (ABC): $309 million 1992 Albertville (CBS): $243 million while hours of prime-time flattened. . . 1976: 28.5 1980: 35.0 1984: 42.0 1988: 53.5 1992: 52.0 (Estimate) as prime-time ratings slip. 1976: 21.3 1980: 23.6 1984: 18.4 1988: 19.3 1992: 17.0 (Estimate) Source: CBS