NBC Wins Rights to 2010, 2012 Olympics

With a whopping $2.2-billion bid, NBC won the right Friday to televise the 2010 Winter Games and 2012 Summer Olympics to viewers in the United States.

The General Electric Co.-owned network, which has televised every Summer Games since 1988, beat out ABC and Fox with its commitment to pay $820 million in fees for the 2010 Winter Games, $1.18 billion for the 2012 Summer Olympics and $200 million, mostly for promotional and marketing fees.

The deal was reached even though it has not been decided where the 2010 and 2012 Games will take place. NBC gets no vote, though network executives probably would prefer to see the Games in North America -- where the time zones work for the network, not against it. That’s what happened during the 2000 Summer Games in Sydney, Australia, where the Games were shown primarily on tape delay and proved a ratings dud even though they earned a profit of more than $50 million for NBC.

On July 2, the full Inter- national Olympic Committee membership will pick the 2010 city from three candidates: Vancouver, Canada; Salzburg, Austria; and Pyeonchang, South Korea. New York is in the 2012 race, along with Paris, London, Moscow and Madrid, among others.

The IOC will pick the 2012 site in 2005.

Taken altogether, NBC’s bid trumps by 46% the $1.5 billion it paid for the 2006 Winter Games and 2008 Summer Games, part of a $3.5-billion deal the network struck in 1995 to televise all the Games between 2000 and 2008.

The deal makes clear that despite corruption scandals, doping issues and management turmoil that in recent years have bedeviled the Olympic movement, particularly in the United States, the interlocking five rings retain a marketing magic, experts said.

“That’s staggering,” said Rick Burton, head of the Warsaw Sports Marketing Center at the University of Oregon, of the $2.2-billion bid. “Eight hundred twenty million for the Winter Olympics -- the Winter Olympics! -- at a time when no one knows what the technology even looks like. Wow.”

Said Keith Allo, the U.S. Olympic Committee’s chief of entertainment properties: “In the world of television, what the networks were bidding on was absolutely the athletes and what they represent for our country. I think this showed in spades a vote of confidence in the [Olympic] movement in the United States, in the USOC and in the athletes we represent.”

After the deal was signed Friday night at IOC headquarters in Lausanne, Switzerland, NBC Sports Chairman Dick Ebersol said, “The Olympics are something really, really special. They are the only great family viewing experience left in all of American television.”

NBC said it expected to make money on the deal -- even though the package means that each day of the 2010 and 2012 Games it televises will cost it at least $64.7 million. NBC made $75 million from last year’s 2002 Winter Games and is anticipating that next year’s Summer Olympics in Athens will be “very profitable,” Ebersol said.

“We’re a General Electric company,” he said. “You do not get out of the building without a business plan. And in this particular case, there’s a pretty sound business plan, which shows we’re going to do more than break even on these two Olympics.”

The agreement illuminates the new realities of the television business, those involved said. The deal happened because it wasn’t just NBC at the table. It was NBC plus its broadcast partners, including MSNBC, CNBC, Bravo, the Spanish-language network Telemundo and, most important, GE, said IOC President Jacques Rogge.

In a twist not seen in recent Olympic TV rights negotiating, GE agreed not only to underwrite the broadcast rights deal but also to contribute $160 million to $200 million to the IOC’s top-tier marketing program, called TOP.

Details remain to be worked out, but Rogge said, “We are very pleased with what we have got, and we are very grateful to GE and NBC.”

The U.S. Olympic Committee emerged a winner too, with a 12.75% cut of the $2 billion in TV rights fees; in all, the deal could be worth nearly $300 million to the organization.

David Hill, chairman of News Corp.’s Fox Sports, said in a statement that its bid was “conservative,” based on a “very traditional network approach.” An industry source, speaking on condition of anonymity, said the bid was “well below” $2 billion.

Said Mark Mandel, a spokesman for Walt Disney Co.’s ABC: “We put forth a very attractive offer, and we wish we had won the rights under the terms we had proposed.”