13 June 2011


The riskiest betting in TV sports, maybe in all of sports, begins Monday in Lausanne, Switzerland: Bidding for U.S. rights to the 2014 and 2016 Olympics — and perhaps more Games.
It's not even clear how many Games are up for grabs, which fits a process with lots of moving parts. The International Olympic Committee has indicated it won't require expected bidders NBC, ESPN/ABC and Fox to go after more than the two Games — the 2014 Winter Games in Sochi, Russia, and 2016 Summer Games in Rio de Janeiro — on the auction block. But it will listen to bids that include the 2018 and 2020 Games, whose sites haven't been picked.
Nothing else in U.S. sports costs so much and has so many variables. Airing the Olympics means selling millions of viewers on largely unknown athletes in sports few Americans watch.
The network winning this week's bidding faces intangibles such as how many Americans will win many medals, time-zone differences and how evolving social media and technology like 3-D TV will change the media landscape and how the games are consumed by 2014 and 2016. And then there are issues networks probably don't even want to think about, such as the possibility of a terrorist act.
Adding to the bidding tension was the announcement last month that NBC's Dick Ebersol, who oversaw TV production of 10 Olympics since 1992, resigned and won't present NBC's bid.
Getting the 2014 and 2016 Games likely will cost billions. And, with the 2016 Games in an exotic locale in a favorable time zone for U.S. networks, the bids to get 2014 might really be bids to lock up 2016.
NBC, after paying a total of $2 billion for the 2010 Vancouver Winter Games and 2012 London Summer Games, lost $223 million on Vancouver — a Games broadcast during an economic downturn — and might lose as much next summer on London. But the IOC, which gets about half of its total TV money and about one-third of its total revenues from U.S. TV money, expects prices to go up.
IOC TV negotiator Richard Carrion has said the IOC expects U.S. rights for 2014 and 2016 to fetch an increase on NBC's $2 billion total for 2010 and 2012.
That $2 billion will buy the winning network about 30 days of action. By contrast, consider that NBC pays $1.8 billion for three seasons of its highly rated prime-time Sunday night NFL games in a TV package that also includes Super Bowls.
And Olympics draw the masses. A Summer Games can draw ratings equal to seven or eight Super Bowls over 17 days.
Besides prime-time shows that usually out-rate NFL prime-time action, an Olympics can create at least temporary ratings boosts to a network's cable channels. That means more eyes for advertisers.
For example, MSNBC more than tripled its daytime rating when NBC, in widely expanding Winter Olympic cable TV coverage in 2002, replaced MSNBC's news shows with curling.
And having the Olympics can create a sort of halo effect for its non-Olympic programming by giving rating pops to its morning and evening news shows and late-night comedy.
NBC's $2 billion bid for the 2010 and 2012 Games also came with a related $200 million Olympic sponsorship from then-NBC parent General Electric, which made it $900 million above Fox's runner-up bid. A consultant, an ex-CBS Sports head, doesn't expect any such pre-emptive bids this week, figuring each network will be trying to win by a dollar.
And he gives an advantage to NBC stating everybody knows about NBC's experience, and nobody thinks they could outsell what NBC did.
One man, who negotiated several deals with Ebersol as the IOC's marketing commission chairman, seems to disagree. He told the Associated Press after Ebersol resigned that if they come without Ebersol, I guess they just come with a wallet. Who's going to present this for you? How do you generate any enthusiasm or confidence on the part of the IOC at a time when some of these other networks are making favorable noises?
Add it all up and Olympic TV is as close as big-time TV sports ever gets to roulette.
This week's bidding includes a new brainteaser.
For networks to figure out how much the Olympics are worth, this time at least two of the bidders need to predict whether millions of viewers really want drastic change in how they watch the Games. Do Americans want to watch the Olympics as if they were watching, well, sports?
That's not how the Games, the rare TV sports event that generates majority-female audiences, have been shown. Under Ebersol, the dictum was straightforward: Hold the best action for prime time because that's when most people are available to watch. So while networks buy up all the various digital rights, they bring in the vast majority of their revenues through prime time.
Rio, whose local time is one hour later than the East Coast, might offer such opportunities — unlike Sochi, which is eight hours later than the East Coast.
But NBC felt its priority on prime time was more important than any effect of viewers learning the results of events before watching them. Ebersol stressed the network was "obviously looking to drive the largest possible audience at the time when they are available to watch."
NBC even negotiated with the IOC during the 2008 Beijing Games to have Michael Phelps’' swimming finals scheduled so viewers in the USA could watch them live in the morning on his march to eight gold medals.
And the Olympics can be presented as more of a spectacle than the mainstream sports viewers are used to seeing live. Even action whose results were big news — the 1980 USA-Soviet Union "Miracle on Ice" and the 1994 Nancy Kerrigan-Tonya Harding showdowns — drew huge ratings on tape delay.
NBC hasn't commented on its Olympic plans post-Ebersol. Fox and ESPN/ABC say they would have live coverage.
They believe the thing that drives sports is that it's live. The thing they would do different (from NBC) is that they would present everything live which wouldn't preclude action being repackaged for prime time.
While asking networks about their Olympic bid plans is like asking pro poker players what cards they're holding and how they'll play. Fox said last week that they would change the Olympic TV formula by going live. They felt that it just makes sense to try to reach as many people as you can.
And while showing action live would allow other network news shows to air highlights of that action before Fox's prime-time shows, they suggest that won't hurt prime-time ratings.
They believe if those highlights are shown everywhere it amplifies the message that the Olympics are on. So, then you'd tune into Olympic prime time to be told the whole story in context.
Olympic TV wasn't always such a big deal. CBS paid $50,000 for the 1960 Winter Games in Squaw Valley, Calif. Arledge, Ebersol's mentor, put the Games on the TV map in the 1960s and 1970s with charming vignettes about anonymous athletes and far-flung venues.
But politics kept denting Olympic marketability, like when the USA boycotted Moscow's 1980 Summer Games and the Soviet bloc returned the favor by not showing up in Los Angeles four year later. But the Soviet Union's collapse caused an even bigger problem. Without the Cold War, there couldn't be any more of those convenient us-vs.-them story lines that gave viewers instant rooting interests.
Now, Americans can watch sports from anywhere constantly on TV and online. Some wonder whether maybe the Olympics served a connection to the global sports world we don't need anymore.And, it's misguided to think of the Games as just sports programming. It's about sports and entertainment and the overall Olympic brand. And if the unforeseen comes up — interest in the host country, unexpected winners, even terrorism — it just fuels general interest.

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