Showing posts with label Olympics. Show all posts
Showing posts with label Olympics. Show all posts

13 June 2011

OLYMPIC TV COVERAGE BIDS EXPECTED TO BE IN THE BILLIONS

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.

18 February 2010

News & Views: NBC Takes the Gold in Advertising Overkill

USA Today

We interrupt this commercial announcement for an Olympic broadcast.

Granted, that's probably an exaggeration. But you can't blame NBC's prime-time viewers for thinking they're spending more time on breaks than they are on skis, skates and snowboards combined.

Yet what can a cash-strapped NBC do? In hindsight, the network clearly bid too much to broadcast these Winter Games, a money-losing mistake for which it, and viewers, are now paying. Still, as long as America puts its Olympic broadcasts in the hands of free enterprise, and as long as the International Olympic Committee insists on getting roughly half its broadcast money from the American bid alone, we're going to find ourselves in this ad-crazed fix — particularly when a bad economy reduces the amount NBC can charge for what it gets.
Economics are also why the major events you do see — like Lindsey Vonn's gold-medal ski run Wednesday — are confined to prime time, even if that requires ditching "live" for tape (as it always does on the West Coast). Ad rates are highest in prime time, which means the network needs as many viewers there as it can possibly gather. It can't afford to diminish that audience by letting you watch, or worse, record, big events in the afternoon.

Breaks and tape, that's the game NBC is stuck playing; no sense trying to change the rules in the middle. But we can ask for a few tweaks:

•Divorce the Ref.  Considering that NBC has already said it's going to lose money on these games, we can't begrudge the network any ads it can sell. What grates are those incessant in-house promos for The Marriage Ref, Parenthood and The Celebrity Apprentice, among others. NBC has run so many of them so often, it's beginning to feel like we've already seen the shows and we're just waiting for the cancellation notices.

•Drop the Dragon.
  Never mind that those animated Viking-Olympic spots aren't funny, or that poor Bob Costas seems to cringe every time he has to introduce one. They're ads. Air them as ads, or don't air them at all.

•A little less Triumph of the Human Spirit
.  When we're back from a break, how about taking us to an event and skipping some of the profiles, particularly as NBC has returned to the sob-sister attitude it had ditched after Sydney. There's no doubt that many of the athletes have had to overcome adversity, but every setback isn't a tragedy — and tragedies are hardly the sole province of star athletes. If we can appreciate the Super Bowl without knowing every problem endured by every player, odds are we can do the same at the Olympics.

29 January 2010

NBC's Dick Ebersol Frustrated With Immelt Olympic Remarks

Media Daily News

The Olympics are less than a month away -- and NBC Universal sports chief Dick Ebersol has been speaking about more than the majesty of figure skating or intensity of hockey. There was the much-publicized rebuke of NBC late-night host Conan O'Brien. And now, he's expressed frustration with his ultimate boss, General Electric CEO Jeff Immelt.

In comments published Wednesday in The New York Times, Ebersol suggested Immelt's statements last month that GE would lose $200 million on the Vancouver Olympics has affected the sales process.

Immelt, who runs a company with $17 billion in profits, was somewhat casual in his December prediction, referring to a probable loss of "a couple hundred million bucks."

But Ebersol told the Times: "When you say something like that, advertisers think they'll get a bargain, and we've told them there aren't any." Ebersol added that he wished Immelt had made the revelation at the end of January, "so it didn't cause any disruption of sales." Immelt had said NBCU's sales team would do a good job, "but it's just a more difficult sales environment for a big event."

On Ebersol's end, he is likely to have a new top boss in Comcast CEO Brian Roberts, once the cable operator takes over NBCU in about a year. GE controls NBCU, but will be a minority owner then.

Ebersol's commentary comes from someone known, in part, for diplomacy. His relationships with the oft-recalcitrant International Olympic Committee have led to lengthy rights deals and last summer in Beijing, swimming events being held at times preferable for NBCU.

Ebersol's frustration with Immelt came days after he told the newspaper that O'Brien has been an "astounding failure" as host of "The Tonight Show." Ebersol has experience in late night at NBC, having worked on "Saturday Night Live." He apparently is an advisor in running the daypart.

He added that a reason for O'Brien's lackluster ratings and firing from the 11:30 time slot and "Tonight Show" was a failure to "broaden the appeal of his show." Ebersol said he had advised O'Brien to remember there are viewers in places like Chicago and Des Moines, and not just on the coasts. He was "stubborn," Ebersol added.

The Times noted Ebersol's comments about NBC's late-night imbroglio were intended as a defense against criticism leveled at NBCU CEO Jeff Zucker and O'Brien's replacement, Jay Leno.

26 January 2010

NBC Will Lose $250 Million on Winter Games

Media Week

Despite increasing demand from advertisers, NBC expects to lose a quarter of a billion dollars with its presentation of the 2010 Winter Olympics.

General Electric vice chairman and chief financial officer Keith Sherin on Friday told investors that NBC anticipates “a loss of somewhere around $250 million on the Olympics,” revising downward the $200 million hit GE chairman and CEO Jeffrey Immelt predicted in mid-December.


Ad dollars have begun pouring in over the last few weeks, Sherin said. “We are seeing pretty good demand for the Olympics. The advertising market is picking up,” Sherin said. While a late flurry of activity has NBC anticipating national ad sales to add up to between $650 million and $700 million, Sherin cautioned that the recent boost in sponsor commitments will not be enough to offset the $820 million rights fee and the costs associated with producing the two-week event.

While NBC acknowledged that it will take a loss on the Games, the network believes that ratings will have nothing to do with the shortfall. Media buyers said the network has set a 14.0 prime-time ratings guarantee for Vancouver, which kicks off on Friday, Feb. 12. The Peacock averaged a 12.2 rating during the 2006 Torino Games, per Nielsen.

In the fourth quarter of 2009, GE’s NBC Universal unit posted a profit of $602 million, down 30 percent from the year-ago period ($865 million). Revenue slipped 3.7 percent to $4.27 billion.

Sherin said the declines could be attributed to the higher rights fees NBC paid for its Sunday Night Football package, as well as disappointing DVD sales at Universal Pictures.

NBCU’s cable TV portfolio continued to shine in Q4 09, as the unit boosted revenue by 8 percent to $1.3 billion, thanks to a strong showing by general-entertainment nets USA Network, Syfy, Bravo and Oxygen. The latter three channels individually lifted profit 20 percent in the quarter, per Sherin.

Ratings momentum and a stronger scatter market helped drive the cable nets. Sherin said Q4 CPMs were “up over 30 percent [from upfront pricing],” adding that the networks continue to command similar premiums in the current quarter.

On the broadcast side of the ledger, which includes the NBC flagship network, local television stations and Spanish-language channel Telemundo, Q4 revenue came in at $1.6 billion, down 2 percent from the year-ago period.

As with cable, scatter was a boon to the broadcast business in the last three months of 2009. “Pricing on scatter for the broadcast network was up low double digits in the fourth quarter, and the outlook for the first quarter is up over 20 percent,” Sherin said.

GE has little to say about its deal to sell a controlling stake of NBCU to cable giant Comcast, a transaction that is expected to face intense scrutiny from federal regulators. “We are working jointly on preparing our regulatory filing and our other notices with the Department of Justice and the FDC to get that under way,” Sherin said.

Sherin also glossed over last week’s resolution of the Jay Leno-Conan O’Brien late-night soap opera. “Everyone is aware of our decision to move Leno back to the Tonight Show and to reset the 10 p.m. lineup after the Olympics.” Sherin said. “I am not sure I could report more than has been written on this subject.”
Despite increasing demand from advertisers, NBC expects to lose a quarter of a billion dollars with its presentation of the 2010 Winter Olympics.

General Electric vice chairman and chief financial officer Keith Sherin on Friday told investors that NBC anticipates “a loss of somewhere around $250 million on the Olympics,” revising downward the $200 million hit GE chairman and CEO Jeffrey Immelt predicted in mid-December.

Ad dollars have begun pouring in over the last few weeks, Sherin said. “We are seeing pretty good demand for the Olympics. The advertising market is picking up,” Sherin said. While a late flurry of activity has NBC anticipating national ad sales to add up to between $650 million and $700 million, Sherin cautioned that the recent boost in sponsor commitments will not be enough to offset the $820 million rights fee and the costs associated with producing the two-week event.

While NBC acknowledged that it will take a loss on the Games, the network believes that ratings will have nothing to do with the shortfall. Media buyers said the network has set a 14.0 prime-time ratings guarantee for Vancouver, which kicks off on Friday, Feb. 12. The Peacock averaged a 12.2 rating during the 2006 Torino Games, per Nielsen.

In the fourth quarter of 2009, GE’s NBC Universal unit posted a profit of $602 million, down 30 percent from the year-ago period ($865 million). Revenue slipped 3.7 percent to $4.27 billion.

Sherin said the declines could be attributed to the higher rights fees NBC paid for its Sunday Night Football package, as well as disappointing DVD sales at Universal Pictures.

NBCU’s cable TV portfolio continued to shine in Q4 09, as the unit boosted revenue by 8 percent to $1.3 billion, thanks to a strong showing by general-entertainment nets USA Network, Syfy, Bravo and Oxygen. The latter three channels individually lifted profit 20 percent in the quarter, per Sherin.

Ratings momentum and a stronger scatter market helped drive the cable nets. Sherin said Q4 CPMs were “up over 30 percent [from upfront pricing],” adding that the networks continue to command similar premiums in the current quarter.

On the broadcast side of the ledger, which includes the NBC flagship network, local television stations and Spanish-language channel Telemundo, Q4 revenue came in at $1.6 billion, down 2 percent from the year-ago period.

As with cable, scatter was a boon to the broadcast business in the last three months of 2009. “Pricing on scatter for the broadcast network was up low double digits in the fourth quarter, and the outlook for the first quarter is up over 20 percent,” Sherin said.

GE has little to say about its deal to sell a controlling stake of NBCU to cable giant Comcast, a transaction that is expected to face intense scrutiny from federal regulators. “We are working jointly on preparing our regulatory filing and our other notices with the Department of Justice and the FDC to get that under way,” Sherin said.

Sherin also glossed over last week’s resolution of the Jay Leno-Conan O’Brien late-night soap opera. “Everyone is aware of our decision to move Leno back to the Tonight Show and to reset the 10 p.m. lineup after the Olympics.” Sherin said. “I am not sure I could report more than has been written on this subject.”