Ebersol’s Deal Had Some Familiar Rings to It

It was 3 in the morning Saturday, and Dick Ebersol, the longtime head of NBC Sports, was on a second-floor balcony at the plush Beau Rivage Hotel in Lausanne, Switzerland, looking out over shimmering Lake Geneva, the French Alps off on the horizon, another victory cigar burning hot-red in the dark.

Just hours before, NBC had won the right to televise the 2010 Winter Games and 2012 Summer Olympics to viewers in the United States. The deal cost $2.2 billion and extends NBC’s franchise over and identification with the Games; NBC televised its first Olympics from Tokyo in 1964 and has broadcast every Summer Games since 1988.

After the deal was signed, there was a celebratory banquet at the hotel, and there were rounds of toasts. Now, out on the balcony, with the cigar, a potent Cohiba, a Cuban, of course, there was finally time for a moment of reflection -- in particular, about the last bit Ebersol had said in the banquet hall as he’d gone around the room.

“I can’t sit down,” he’d said to those gathered there, “without telling you how much I’ve enjoyed all of this. But this is my last negotiation.”

For Ebersol, who will turn 56 on July 28 and will be 65 in 2012, this $2.2-billion deal, his last Olympic deal, marks the capstone to a life whose professional arc has been tied, again and again, to the Olympics.

At 19, Ebersol dropped out of Yale to help ABC prepare its telecast of the 1968 Winter Olympics from Grenoble, France. He was the first Olympic television researcher, working with the legendary Roone Arledge.

In the mid-1970s, at NBC, Ebersol played a key role in launching “Saturday Night Live.” He left the network, then returned in 1989 as president of NBC Sports. Chairman of NBC Sports since 1998, he was the key player in the 1995 deal by which the network secured the rights to televise each edition of the Games, Summer and Winter, from 2000 through 2008. That two-part deal, both pieces negotiated in secret, cost $3.5 billion.

The deal struck Friday was an open auction conducted at IOC headquarters in Lausanne. NBC topped ABC and Fox; sources said neither put forward a bid anywhere near NBC’s.

The 2010 and 2012 Games are so far away that no one knows yet where they’ll be. The International Olympic Committee will pick the 2010 site on July 2. Three cities are in the running: Vancouver; Salzburg, Austria; and Pyeonchang, South Korea. The IOC will pick the 2012 city in 2005. New York, London, Paris, Moscow, Madrid and others are in the race.

NBC has intensified its association with the Olympics over the years even as it has opted not to pursue other big-time sports with which it also used to be identified -- the NFL and the NBA, for instance.

“We’re out of all of those sports because none of those sports were what we thought to be successful business opportunities going forward,” Ebersol said in a conference call Friday with news reporters. A moment later, he said that the “business of big-time American sports has gotten out of hand,” adding, “That is not true of the Olympics,” and for a very specific reason:

“The Olympics are not to us a sporting event,” he’d said earlier Friday, in a separate conference call. “They’re not about sports rights. The Olympics are something really, really special. They are the only great family viewing experience left in all of American television.

“They are the only thing that puts mom, pop and the kids in front of the television set at the same time, when ordinarily dad would be watching a football game, mom would be in some room watching ‘ER’ and the kids would be in another room watching MTV. The Olympics are the only thing that brings them all together.”

NBC made a significant profit from its presentations in Atlanta ($70 million), Sydney (more than $50 million) and Salt Lake City ($75 million), and all signs indicate that it will do so again next year from Athens, Ebersol said. The 2006 Games will be in Turin, Italy, 2008 in Beijing.

The Olympics run for 17 days. Two of them mean 34 days. At $2.2 billion, NBC’s per-day expenses for the 2010 and 2012 Games rough out at $64.7 million. But the network will make money from this new deal, according to Ebersol and other executives from the network and its parent company, General Electric Co.

Details were not divulged, but Ebersol said, “Believe me, we’re a General Electric company. 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.”

In its entirety, the 2010 and 2012 deal includes:

$820 million for the 2010 Games; $1.181 billion for the 2012 Games; $12 million for rights fees to the 2010 and 2012 U.S. Olympic Trials; $10 million to develop a digital TV library; $160 million to $200 million for a GE sponsorship in the top-tier IOC marketing program, called TOP; and hundreds of millions of dollars more, not itemized, to promote the Olympic brand, presumably through air time given to IOC advertisements.

The rights fees alone for 2010 and 2012, $2.001 billion, mark a 33% jump over the $1.508 billion NBC shelled out for the 2006 and 2008 Games.

The 2000 and 2002 Games cost NBC $1.25 billion, which means that in a mere eight years, the cost of a paired set of Olympics has skyrocketed 60%.

The new deal gives NBC rights not just to televise the Games on the network itself and its cable partners -- MSNBC, CNBC, Bravo and Spanish-language Telemundo -- but to pursue the technological and profit possibilities in such platforms as video-on-demand, wireless, broadband and even the movies.

In its presentation Friday to the IOC, NBC pitched the idea of putting a three-minute Olympic highlight reel at Regal Cinema theaters each night of the 2010 and 2012 Games.

Even the popcorn bag that patrons would be eating out of, NBC officials told the IOC, would be emblazoned with the NBC and five-ring logos -- at which point, in classic Ebersol style, he and other senior NBC officials reached under the conference room table and presented IOC President Jacques Rogge and others with popcorn. It had been bought by Ebersol’s longtime assistant, Aimee Leone, at a Wal-Mart in Suffern, N.Y., four $1 bags, and ferried to Switzerland for just that moment.

The deal-maker for 2010 and 2012, however, proved to be the TOP sponsorship -- an unprecedented move and testament to the financial wherewithal of GE. Now GE is positioned to become a major player in the infrastructure needed to make a Games happen.

Bob Wright, the vice chairman of GE and CEO of NBC, said: “Certainly General Electric is the largest company in the world involved in infrastructure activities, such as power facilities, lighting, a lot of special finance areas, a lot of things that are involved with the actual construction, the activities that take place in preparations for a Games, whether they be in Beijing or possibly New York or Vancouver or wherever.

“A TOP sponsorship would provide General Electric with an opportunity to have those goods and services associated and used in connection with the construction. So there’s definitely a real advantage in that.”

Gary Zenkel, a senior NBC executive, had thought of the TOP tie-in “in the early spring,” Ebersol said. “To me, I saw it right away as a differentiator,” Ebersol said, something neither the Walt Disney Co., parent of ABC, nor News Corp, parent of Fox, could match.

“It would allow us to put something down that was substantial and, at the same time, I could look GE in the eye and say, ‘You’ll get all the money back.’ It’s not the same as if the economy goes bad and you find yourself in an advertising rut one of the years you have the Olympics. That’s not the same for infrastructure. You still have to build all these things [for a Games].”

A mere three hours after submitting their bid, Ebersol and other NBC officials, whiling away the time at the Beau Rivage, were summoned back to the IOC offices to talk about the parameters of the TOP sponsorship. He and the others from NBC hadn’t been expecting a decision from the IOC until Saturday, maybe even today, so when they got that quick call, they knew they’d done it -- again.

“The negotiating part ... has some sidelights that can read like a European dark novel or something like that,” Ebersol said early Saturday morning, recalling 1995. This time around, “I felt good about this whole negotiation for quite some period of time until today -- waiting the three hours until the phone call.

He also said, “For me the real pleasure of the Olympics is actually producing them. That’s the one time in my life everything professionally comes together. I’m doing what I really love, being the central producer of an Olympic Games.

“I grew up, my first impressions of television, were being in a control room, watching Roone do it.”

So now, through 2012, it’s still Ebersol’s show, and he said, the image of Arledge -- who died last Dec. 5 -- clearly near, “Obviously, I relish the opportunity to follow in his footsteps.”