Sites Unseen, NBC Locks in Olympics Through 2008 : Television: Securing future of the Games, network pays $2.3 billion for rights to three more events, even before cities are chosen.

Virtually guaranteeing the Olympic movement’s financial stability for the next 12 years, NBC announced Tuesday that it will pay $2.3 billion for the U.S. television rights to the Summer Games in 2004 and 2008 and the Winter Games in 2006.

The timing was shocking in the television industry because only four months ago NBC agreed to pay the International Olympic Committee $1.27 billion for the 2000 Summer Olympics at Sydney, Australia, and the 2002 Winter Olympics at Salt Lake City.

The agreement also is extraordinary because for the first time, a U.S. network has bought rights to the Games without knowing the sites. The IOC selects Olympic host cities seven years in advance.

That underscores NBC’s apparent desire to become as identified with the Olympics’ five rings as with its own peacock. With the rights to the 1996 Summer Olympics at Atlanta previously awarded to the network, it will televise six of the next seven Games. CBS has the rights to the 1998 Winter Olympics at Nagano, Japan.

“This is a momentous decision for us,” said Bob Wright, NBC President and Chief Executive Officer, at a New York news conference. “But having the Olympics through 2008 forms the cornerstone of our vision for NBC going into the next millennium.”

As with last summer’s negotiations that resulted in rights fees of $705 million for the Sydney Games and $545 million for the Salt Lake City Games, plus an additional $10 million for each city’s organizing committee, NBC initiated the talks and the IOC did not seek bids from competing networks.

Among the terms is that NBC will continue to offer viewers free, over-the-air telecasts of its most significant coverage. Some events may be assigned to its cable networks, CNBC and America’s Talking, but there will be no further experiments during the length of the contract with pay-per-view, as NBC tried from Barcelona in the summer of 1992.

Officials from ABC and CBS would not comment Tuesday, but David Hill, president of Fox sports, said the deal is “an absolute masterstroke for [IOC President] Juan Antonio Samaranch and the IOC. This underwrites the Olympics for the next decade because it means, despite any global economic downturn, U.S. rights money is guaranteed to host cities. This will mean record numbers of cities bidding to host the Games. For NBC, it’s a bold, impressive move.”

Also benefiting financially is the U.S. Olympic Committee, which through an agreement with the IOC receives 10% of television rights fees paid by U.S. networks. As a result of the latest deal, the USOC was able to guarantee $230 million of its budget between 2004 and 2008.

John Krimsky Jr., the USOC’s deputy secretary general, called it “a tremendous windfall.”

“Television rights fees account for only 16% of our budget, so we still have to raise a lot of money,” he said. “But in a very, very positive way, it signals to our constituency that the solvency of the USOC is assured to 2000 and beyond.”

NBC will pay $793 million and $894 million for the Summer Games of 2004 and 2008, respectively, and $613 million for the Winter Games of 2006. In each case, that is a 3% increase over the amount the network paid for the rights to the previous Summer or Winter Games.

Richard Pound of Canada, an IOC vice president and the lead television negotiator, said that, depending on inflation, it is possible that the committee could have received more money by waiting until closer to the Games to open negotiations. But he said the IOC chose, for reasons of “stability and predictability,” to accept the guaranteed money.

He also said that the value of the deal could be higher because of an additional revenue-sharing agreement between NBC and the IOC.

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Olympic TV rights

NBC has obtained exclusive U.S. broadcast and cable TV rights to the 2004, 2006 and 2008 Olympic Games, the first time a network has locked up the Games, the first time a network has locked up the Games before sites have been awarded. Cost of TV rights, network and Olympic site, in millions:

1996 (Summer): $456 NBC; Atlanta

1998 (Winter): $375 CBS; Nagano, Japan

2000 (Summer): $705 NBC; Syndney, Aus.

2002 (Winter): $545 NBC; Salt Lake City

2004 (Summer): $793 NBC; (TBA)

2006 (Winter): $613 NBC; (TBA)

2008 (Summer): $894 NBC; (TBA)