NBC Wins 1996 Olympics for a Record $456 Million

NBC will televise its third consecutive Summer Olympics in 1996. The network won the rights to the Atlanta Games on Tuesday with a bid of $456 million, the highest for an Olympics.

The International Olympic Committee awarded the Games to NBC after a daylong negotiating session in New York.

Yet to be determined is whether NBC will accept a cable partner. Turner Broadcasting offered $75 million to be a partner for the 1992 Summer Games at Barcelona, but NBC turned it down.

IOC Vice President Dick Pound said NBC told him it is prepared to make a cable deal under the right circumstances. “We clearly hope there will be one,” Pound said.

It seems fairly safe to assume NBC will not come up with another pay-per-view Triplecast similar to the one it did for Barcelona. That was a critical success but a financial disaster.

ABC had talked with Turner and ESPN about a cable partnership. The plan was to put not-ready-for-prime-time events on two Turner channels, TBS and TNT, plus ESPN. It was to be sort of a Triplecast without the price tag, which would figure as a boon for viewers.

But with ABC, which hasn’t done a Summer Olympics since 1984, out of the picture, a three-channel cable deal probably is out, too. For now, it appears NBC is not prepared to make such an extensive cable deal.

One thing NBC does plan to do, for a change, is make a profit.

“We anticipate making money,” said Dick Ebersol, president of NBC sports.

The winning bid, of which 60% goes to the organizers, was $55 million more than NBC paid for the Barcelona Olympics, an undertaking that resulted in a $100-million loss for the network.

Dennis Swanson, ABC sports president, left the talks without comment, but network spokesman Mark Mandell said: “Obviously, we were very interested and thought we had a very competitive bid. We’re sorry it didn’t work out, but it’s not the end of the world.”

CBS, which televised the 1992 Winter Olympics at Albertville, France, and will be the primary carrier of the ’94 Winter Games at Lillehammer, Norway, was an early dropout in Tuesday’s bidding, stopping about 45 minutes after a second round of talks began.

“As we reviewed the bids submitted to us, it became clear to us that the market is a little bit more complex than it was in the past,” Pound said. “In the final analysis, it became clear to us that the superior bid was submitted by NBC.”

NBC’s original bid was $456 million to ABC’s $440 million and CBS’ $405 million. In the second round of talks, NBC held firm while the other networks bumped their bids by $10 million.

NBC’s plan calls for 168 hours of coverage, up slightly from the 161 hours it did from Barcelona. Also, to generate more ad revenue, the opening ceremonies will be moved from Saturday afternoon to Friday night in prime time. That will extend the Games over 17 days, rather than 16.

Billy Payne, president of the Atlanta organizing group known as ACOG, had set his sights on $600 million from U.S. TV for the Atlanta Games, the first in the United States since the 1984 Los Angeles Olympics. At the same time, network sources indicated they would feel more comfortable in the range of $375 million to $400 million.

The European Broadcasting Union already has been awarded the European rights after bidding a record $250 million. The EBU bought European rights to the Barcelona Games for $90 million.

Television ratings for the Summer Games have declined since 1984, when ABC averaged a prime-time rating of 23.2 with a 44 share. NBC averaged 17.9 and 32 in prime time for the 1988 Olympics at Seoul and 17.5 and 34 in prime time for Barcelona.

The Olympics and TV

How rights fees for the Olympics have increased since 1980:

Year Games and Site Network Fees 1980 Winter at Lake Placid ABC $15.5 million 1980 Summer at Moscow NBC $87 million 1984 Winter at Sarajevo ABC $91.5 million 1984 Summer at Los Angeles ABC $225 million 1988 Winter at Calgary ABC $309 million 1988 Summer at Seoul NBC $300 million 1992 Winter at Albertville CBS $243 million 1992 Summer at Barcelona NBC $401 million 1994 Winter at Lillehammer CBS $300 million 1996 Summer at Atlanta NBC $456 million

Cost increase of 30-second prime-time commercials:

Year Games Cost 1980 Winter $100,000 1980 Summer N/A 1984 Winter $260,000 1984 Summer $260,000 1988 Winter $300,000 1988 Summer $330,000 1992 Winter $280,000 1992 Summer $275,000

How prime-time ratings have declined:

Year Games Rating 1980 Winter 23.6 1980 Summer N/A 1984 Winter 18.4 1984 Summer 23.2 1988 Winter 19.3 1988 Summer 16.9 1992 Winter 17.0 1992 Summer 17.5

Sources: CBS, Nielsen.