News Corp.’s phone-hacking crisis claimed two top newspaper executives as Chief Executive Officer Rupert Murdoch defended his handling of the scandal and the FBI began a U.S. probe of the company.
Les Hinton, chairman of News International in the years the alleged hacking occurred, stepped down as head of the Dow Jones division yesterday. That followed the exit of News International CEO Rebekah Brooks. She was editor of the News of the World, the newspaper implicated in the scandal, from 2000 to 2003.
The spotlight will shift back to Murdoch and his son, James, the deputy chief operating officer, on July 19 when the two testify about the phone-hacking scandal before the U.K. Parliament. With the FBI involved and the company facing civil litigation in the U.S., the scandal is likely to grow.
In a statement announcing Hinton’s departure, the 80-year- old CEO downplayed his own importance to the company he built from two inherited Australian newspapers. He stated that News Corp. is not Rupert Murdoch, that it is the collective creativity and effort of many thousands of people around the world, and few individuals have given more to this company than Les Hinton.
FBI Role
The Federal Bureau of Investigation, prodded by members of Congress, began looking into whether News Corp. employees may have targeted the phones of victims of the Sept. 11, 2001, terrorist attacks.
U.S. Representative Peter King, the Republican chairman of the House Committee on Homeland Security, asked FBI Director Robert Mueller in a July 13 letter to investigate whether News of the World employees tried to access voicemails belonging to the victims through bribery and illegal wiretapping.
The FBI stated they are aware of certain allegations pertaining to a possible hacking by News Corp. personnel and they are looking into those charges.
Hiring Counsel
News Corp. has hired criminal defense lawyer Brendan V. Sullivan Jr.
of the Washington law firm Williams & Connolly LLP, the New York Times reported. Sullivan’s clients have included former Alaska Senator Ted Stevens, ex-New York Stock Exchange Chairman Richard Grasso and Reagan White House aide Oliver North.
Murdoch, in an interview with the News Corp.-owned Wall Street Journal, said an independent committee led by a distinguished non- employee will investigate the phone-hacking allegations. He claims the company has handled the crisis extremely well, with minor mistakes.
He met yesterday with the parents of Milly Dowler, a murdered schoolgirl whose voicemails were hacked by News of the World in 2002.
After meeting the Dowlers, Murdoch said he was appalled to find out what happened. He claims he apologized.
Dropped Bid
Murdoch has been in London since last weekend as the scandal escalated and politicians of all parties called on him and James, 38, to take responsibility. News Corp. is publishing an apology in all national newspapers in Britain, the younger Murdoch said in a letter to employees.
The now-defunct News of the World tabloid is accused of hacking hundreds of voice mails, including those of murder and terrorism victims, and bribing police for confidential information. Last week, News Corp. closed the 168-year-old newspaper. London police have made at least nine arrests as part of their investigation.
The scandal led News Corp. to abandon its $12.6 billion (7.8 billion-
pound) bid for full control of British Sky Broadcasting Group Plc.
News Corp. rose 21 cents, or 1.3 percent, to $15.64 yesterday in Nasdaq Stock Market trading in New York. The Class A shares have fallen about 13 percent since the first reports on July 4 that News of the World had hacked Milly Dowler’s voice mail.
The resignation of Brooks marked a U-turn for Murdoch, who had stood with the newspaper executive and said she would stay on. Murdoch this week backed his son and heir apparent, saying James had acted as fast as he could, the moment he could.
Family Holdings
The Murdochs must cooperate fully with inquiries into the phone- hacking scandal.
Murdoch controls News Corp. through a 38 percent stake in the company’s Class B voting shares. Those shares represent a 12 percent economic interest in the company, when nonvoting shares are counted as well.
In addition to Rupert Murdoch, News Corp.’s board members include his son Lachlan, 39, as well as James. Murdoch’s daughter Elisabeth, 42, was expected to become a director after selling her Shine Group TV production outfit to News Corp. for $673 million in February.
Justice Department
King’s request to Mueller was one of several by elected officials and media watchdog groups to investigate News Corp. King, who represents part of New York’s Long Island, said in the letter that his district lost 150 people in the attacks.
In a July 13 letter, New Jersey senator Frank Lautenberg asked U.S.
Attorney General Eric Holder and SEC Chairwoman Mary L. Schapiro to investigate whether News Corp. or its subsidiaries breached the U.S. Foreign Corrupt Practices Act.
The act makes it a crime for a U.S.-based company, such as News Corp., to pay foreign officials to get or keep business.
Holder yesterday confirmed the existence of a U.S. probe in public comments he made while in Sydney.
He claims there have been members of Congress in the United States who have asked them to investigate the same allegations, and they are progressing in that regard using the appropriate federal law enforcement agencies in the U.S.
Rupert Murdoch said the company isn’t separating its newspaper assets, which also include U.K.tabloid The Sun, the Times of London and the New York Post. The company will establish a protocol for behavior for reporters across the company, he said.
19 July 2011
12 July 2011
HACKING BY NEWS CORP CAUSES IT STOP PRODUCTION
News Corp.’s Chief Executive Officer Rupert Murdoch is headed to London to help manage fallout from the phone-hacking scandal that forced the closure of News of the World, Britain’s biggest Sunday newspaper.
Murdoch will work from News International’s headquarters in London’s Wapping neighborhood and meet with staff.
The unfolding crisis led to the arrest of the tabloid’s former editor, Andy Coulson, and prompted public anger over allegations its journalists bribed police for stories and hacked into the voice mails of crime victims. The U.K. government said yesterday it will take some time before ruling on News Corp.’s 7.8 billion-pound ($12.5 billion) plan to buy a satellite- TV service.
News Corp., based in New York, said this week it will close the 168-year-old News of the World, a move that failed to stem the company’s stock slide or silence calls for the ouster of Rebekah Brooks, CEO of the News International publishing unit. While Murdoch, 80, and Deputy Chief Operating Officer have both supported Brooks, U.K. Prime told reporters he would have accepted her resignation.
Brooks, 43, said in a letter to the U.K. Parliament’s Home Affairs Committee published today, that she had no knowledge of any phone tapping and has no reason to believe any other of the company’s newspapers used the method to get stories. News International also manages The Times, The Sunday Times and daily tabloid The Sun.
Brooks told News of the World employees yesterday she will try to find them jobs after the newspaper shuts down, while signaling she will remain in her post. All the newspaper’s employees, about 200, will be paid for the next three months, she said.
Murdoch plans to arrive tomorrow.
Shares of News Corp. and BSkyB, the U.K.-based broadcaster it partially owns, have fallen since accusations that its journalists hacked the phones of murder victims and the families of soldiers who were killed in Afghanistan.
News Corp., which operates the Fox television networks and film studios, the Wall Street Journal newspaper and book publisher HarperCollins, fell 68 cents, or 3.9 percent, to $16.75 yesterday in Nasdaq Stock Market trading. The shares were down 7.3 percent for the week. BSkyB fell 7.6 percent yesterday to 750 pence in London, and lost 12 percent this week.
Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.
Coulson, 43, who resigned as press chief in January, was arrested in connection with the phone-hacking probe and an investigation begun this week into claims the tabloid paid police officers for stories. The arrest is the highest-profile so far in the investigation that has ensnared seven people, including six with connections to the paper. Coulson has denied any knowledge of illegal activity when he was editor from 2003 to 2007.
News of the World’s former royal reporter, was re-arrested yesterday and his office at the Daily Star tabloid was searched. London police confirmed they arrested a 53-year-old man and searched his home in Surrey, Englan, yesterday and also raided a London business.
A 63-year-old man was also arrested at a residence in Surrey in connection with the investigation, police said yesterday without identifying him. The 43-year-old man and a 53- year-old man were released on bail, police said in an e-mailed statement without disclosing the names.
Brooks hinted she expects more damaging information to surface. She said that eventually it will come out why things went wrong and who was responsible, and that will be another very difficult moment in this company’s history.
Brooks told News of the World staffers she was among those betrayed by the acts of others. She rejected resignation, saying she is much more useful leading the company through the crisis.
Brooks became head of News International in 2009 after serving as editor of The Sun for 6 1/2 years. Beginning her career as a feature writer for the News of the World in 1989, Brooks rose through the ranks and was editor of that newspaper from 2000 to 2003.
Criticism of Brooks intensified this week with a report that in 2002, when she was editor, the News of the World hacked into the phone of murdered schoolgirl Milly Dowler and deleted voice-mail messages, misleading her parents into thinking she might be alive and complicating the police investigation of her disappearance. Before this week, the phone-hacking scandal had centered on celebrities, politicians and athletes.
Brooks said in her letter to the U.K. lawmakers she wanted to be absolutely clear that as editor she had no knowledge whatsoever of phone hacking in the case of Milly Dowler and her family, or in any other cases during her tenure.
News Corp.’s decision to close the Sunday tabloid came after companies halted advertising in the paper to protest its activities.
The company now needs to find new revenue sources to replace the sales lost in the shutdown. It may add a Sunday edition of the daily Sun.
A website titled thesunonsunday.com was registered July 5. The company hasn’t made any decisions on any new publications or expanding existing ones, Brooks said in the memo.
News Corp. can quickly regain advertisers trust with an overhaul of the outrageous journalistic practices that led to News of the World’s closure. If the company in the next couple of weeks creates a new News of the World with much more ethical behavior, advertisers will return.
A final edition of the News of the World, to be published tomorrow, won’t carry commercial advertising, and News Corp. has offered its ad space to charities. So far household name charities have turned down the offer, preferring not to be associated with the tabloid.
Murdoch will work from News International’s headquarters in London’s Wapping neighborhood and meet with staff.
The unfolding crisis led to the arrest of the tabloid’s former editor, Andy Coulson, and prompted public anger over allegations its journalists bribed police for stories and hacked into the voice mails of crime victims. The U.K. government said yesterday it will take some time before ruling on News Corp.’s 7.8 billion-pound ($12.5 billion) plan to buy a satellite- TV service.
News Corp., based in New York, said this week it will close the 168-year-old News of the World, a move that failed to stem the company’s stock slide or silence calls for the ouster of Rebekah Brooks, CEO of the News International publishing unit. While Murdoch, 80, and Deputy Chief Operating Officer have both supported Brooks, U.K. Prime told reporters he would have accepted her resignation.
Brooks, 43, said in a letter to the U.K. Parliament’s Home Affairs Committee published today, that she had no knowledge of any phone tapping and has no reason to believe any other of the company’s newspapers used the method to get stories. News International also manages The Times, The Sunday Times and daily tabloid The Sun.
Brooks told News of the World employees yesterday she will try to find them jobs after the newspaper shuts down, while signaling she will remain in her post. All the newspaper’s employees, about 200, will be paid for the next three months, she said.
Murdoch plans to arrive tomorrow.
Shares of News Corp. and BSkyB, the U.K.-based broadcaster it partially owns, have fallen since accusations that its journalists hacked the phones of murder victims and the families of soldiers who were killed in Afghanistan.
News Corp., which operates the Fox television networks and film studios, the Wall Street Journal newspaper and book publisher HarperCollins, fell 68 cents, or 3.9 percent, to $16.75 yesterday in Nasdaq Stock Market trading. The shares were down 7.3 percent for the week. BSkyB fell 7.6 percent yesterday to 750 pence in London, and lost 12 percent this week.
Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.
Coulson, 43, who resigned as press chief in January, was arrested in connection with the phone-hacking probe and an investigation begun this week into claims the tabloid paid police officers for stories. The arrest is the highest-profile so far in the investigation that has ensnared seven people, including six with connections to the paper. Coulson has denied any knowledge of illegal activity when he was editor from 2003 to 2007.
News of the World’s former royal reporter, was re-arrested yesterday and his office at the Daily Star tabloid was searched. London police confirmed they arrested a 53-year-old man and searched his home in Surrey, Englan, yesterday and also raided a London business.
A 63-year-old man was also arrested at a residence in Surrey in connection with the investigation, police said yesterday without identifying him. The 43-year-old man and a 53- year-old man were released on bail, police said in an e-mailed statement without disclosing the names.
Brooks hinted she expects more damaging information to surface. She said that eventually it will come out why things went wrong and who was responsible, and that will be another very difficult moment in this company’s history.
Brooks told News of the World staffers she was among those betrayed by the acts of others. She rejected resignation, saying she is much more useful leading the company through the crisis.
Brooks became head of News International in 2009 after serving as editor of The Sun for 6 1/2 years. Beginning her career as a feature writer for the News of the World in 1989, Brooks rose through the ranks and was editor of that newspaper from 2000 to 2003.
Criticism of Brooks intensified this week with a report that in 2002, when she was editor, the News of the World hacked into the phone of murdered schoolgirl Milly Dowler and deleted voice-mail messages, misleading her parents into thinking she might be alive and complicating the police investigation of her disappearance. Before this week, the phone-hacking scandal had centered on celebrities, politicians and athletes.
Brooks said in her letter to the U.K. lawmakers she wanted to be absolutely clear that as editor she had no knowledge whatsoever of phone hacking in the case of Milly Dowler and her family, or in any other cases during her tenure.
News Corp.’s decision to close the Sunday tabloid came after companies halted advertising in the paper to protest its activities.
The company now needs to find new revenue sources to replace the sales lost in the shutdown. It may add a Sunday edition of the daily Sun.
A website titled thesunonsunday.com was registered July 5. The company hasn’t made any decisions on any new publications or expanding existing ones, Brooks said in the memo.
News Corp. can quickly regain advertisers trust with an overhaul of the outrageous journalistic practices that led to News of the World’s closure. If the company in the next couple of weeks creates a new News of the World with much more ethical behavior, advertisers will return.
A final edition of the News of the World, to be published tomorrow, won’t carry commercial advertising, and News Corp. has offered its ad space to charities. So far household name charities have turned down the offer, preferring not to be associated with the tabloid.
F.C.C. Ownership Ruling
In a narrow ruling unlikely to have an immediate effect on current broadcasters, a federal appeals court on Thursday overturned a 2008 decision by the Federal communications Commission to relax restrictions on cross-ownership of newspapers and broadcast outlets in the same city.
The United States Court of Appeals for the Third Circuit, based in Philadelphia, did not rule on the merits of the 2008 regulatory changes, which made it easier for a single company to own both a station and a newspaper in the same locality. Instead, the court said that the F.C.C. had failed to allow sufficient time for official notice and public comment on the new rules, as required by law.
The ruling Thursday essentially sent the issue back to the F.C.C., which is undergoing a mandatory re-evaluation of ownership rules anyway. At the same time, the court upheld most of the media ownership rules handed down by the commission in 2008.
In a statement, the general counsel for the F.C.C., took no notice of the cross-ownership ruling and instead cited the court’s approval of the other rules for ownership, saying that the decision affirms the F.C.C.’s authority to promote competition, localism and diversity in the modern marketplace.”
But counsel for Free Press, a public advocacy group that supported the challenge to the 2008 ownership standard, said that today’s decision is a sweeping victory for the public interest because it concluded that competition in the media — not more concentration — will provide Americans with the local news and information they need.
The head of Media Access Project, one of the groups that brought the case — and the lead lawyer for those groups — acknowledged that the ruling did little more than bounce the issue back to the F.C.C., which will include it in the reassessment of rules that the commission is mandated to make every four years. He also said the more immediate impact would come in the radio business, where efforts by some companies to expand the ownership limits — currently up to eight stations in a single city — were rejected.
The broadcast ownership rules have always been politically charged, with Republican administrations arguing for almost unfettered freedom to own stations and Democratic administrations pushing for limitations to enhance diversity and avoid dominance by the largest media voices. He added that it was possible and even likely that the current F.C.C., which he said seemed more focused on Internet issues, could reinstate the 2008 rule. And then they will take it up again in court.
The United States Court of Appeals for the Third Circuit, based in Philadelphia, did not rule on the merits of the 2008 regulatory changes, which made it easier for a single company to own both a station and a newspaper in the same locality. Instead, the court said that the F.C.C. had failed to allow sufficient time for official notice and public comment on the new rules, as required by law.
The ruling Thursday essentially sent the issue back to the F.C.C., which is undergoing a mandatory re-evaluation of ownership rules anyway. At the same time, the court upheld most of the media ownership rules handed down by the commission in 2008.
In a statement, the general counsel for the F.C.C., took no notice of the cross-ownership ruling and instead cited the court’s approval of the other rules for ownership, saying that the decision affirms the F.C.C.’s authority to promote competition, localism and diversity in the modern marketplace.”
But counsel for Free Press, a public advocacy group that supported the challenge to the 2008 ownership standard, said that today’s decision is a sweeping victory for the public interest because it concluded that competition in the media — not more concentration — will provide Americans with the local news and information they need.
The head of Media Access Project, one of the groups that brought the case — and the lead lawyer for those groups — acknowledged that the ruling did little more than bounce the issue back to the F.C.C., which will include it in the reassessment of rules that the commission is mandated to make every four years. He also said the more immediate impact would come in the radio business, where efforts by some companies to expand the ownership limits — currently up to eight stations in a single city — were rejected.
The broadcast ownership rules have always been politically charged, with Republican administrations arguing for almost unfettered freedom to own stations and Democratic administrations pushing for limitations to enhance diversity and avoid dominance by the largest media voices. He added that it was possible and even likely that the current F.C.C., which he said seemed more focused on Internet issues, could reinstate the 2008 rule. And then they will take it up again in court.
07 July 2011
ESPN GAINS WIMBLEDON
Wimbledon is leaving NBC after 43 years and appears headed to ESPN.
NBC said in a statement Sunday that while they we would have liked to have continued their relationship, they were simply outbid.
A person with knowledge of the negotiations confirmed that ESPN was working on a contract with the All England Club to televise the entire Grand Slam tournament. The person spoke on condition of anonymity because the deal was not ready to be announced.
ESPN had owned the rights to extensively televise early rounds of Wimbledon, with NBC picking up coverage as the tournament progressed, culminating with the Breakfast at Wimbledon broadcasts of the finals.
It would be the latest major sporting event to move from the traditional four over-the-air networks to cable. College football's Bowl Championship Series title games are on ESPN, and NCAA basketball's Final Four will be on TBS in alternating years starting in 2016.
Months into its new partnership with Comcast, NBC is losing a marquee event. The network did keep an even bigger one when it outbid ESPN and Fox last month for four Olympics.
This year was the 32nd anniversary of "Breakfast at Wimbledon," with coverage ending Sunday in the men's final.
NBC said in a statement Sunday that while they we would have liked to have continued their relationship, they were simply outbid.
A person with knowledge of the negotiations confirmed that ESPN was working on a contract with the All England Club to televise the entire Grand Slam tournament. The person spoke on condition of anonymity because the deal was not ready to be announced.
ESPN had owned the rights to extensively televise early rounds of Wimbledon, with NBC picking up coverage as the tournament progressed, culminating with the Breakfast at Wimbledon broadcasts of the finals.
It would be the latest major sporting event to move from the traditional four over-the-air networks to cable. College football's Bowl Championship Series title games are on ESPN, and NCAA basketball's Final Four will be on TBS in alternating years starting in 2016.
Months into its new partnership with Comcast, NBC is losing a marquee event. The network did keep an even bigger one when it outbid ESPN and Fox last month for four Olympics.
This year was the 32nd anniversary of "Breakfast at Wimbledon," with coverage ending Sunday in the men's final.
27 June 2011
HULU FOR SALE?
Hulu.com, the online video site considering a sale, reached a tentative agreement for renewed rights to television shows from its part-owner, Walt Disney Co., according to two people with knowledge of the situation.
The agreement with Disney, which operates the ABC broadcast network, is similar to Los Angeles-based Hulu’s new arrangement with another co-owner, Fox parent News Corp., said the people, who weren’t authorized to speak publicly. The News Corp.-Hulu renewal was reported by Variety this week.
Renewed license agreements will make the website more attractive in a sale, said a managing partner at New York-based management consultant Cg42 LLC. The new agreements will allow more ads to be sold against current shows, including “Modern Family,” which airs on ABC, and Fox’s “Family Guy,” the people said.
A deal is relatively unlikely without the agreements. Any deal would be contingent on ongoing access to that content.
The deals may be signed within weeks, the people said.
A “Modern Family” episode on Hulu includes about 2.5 minutes of ads. On a broadcast network, commercial time totals about 8 minutes per half hour.
Hulu Chief Executive Officer said in a February blog post on the site that, with fewer ads than traditional television, the website is a more effective marketing medium.
A Hulu spokeswoman, declined to comment. A spokeswoman for Burbank, California-based Disney, didn’t respond to requests for comment.
Hulu, whose owners also include Comcast Corp.’s NBC and Providence Equity Partners, was approached by a potential buyer and is weighing its options, a person with knowledge of the situation said this week.
The agreement with Disney, which operates the ABC broadcast network, is similar to Los Angeles-based Hulu’s new arrangement with another co-owner, Fox parent News Corp., said the people, who weren’t authorized to speak publicly. The News Corp.-Hulu renewal was reported by Variety this week.
Renewed license agreements will make the website more attractive in a sale, said a managing partner at New York-based management consultant Cg42 LLC. The new agreements will allow more ads to be sold against current shows, including “Modern Family,” which airs on ABC, and Fox’s “Family Guy,” the people said.
A deal is relatively unlikely without the agreements. Any deal would be contingent on ongoing access to that content.
The deals may be signed within weeks, the people said.
A “Modern Family” episode on Hulu includes about 2.5 minutes of ads. On a broadcast network, commercial time totals about 8 minutes per half hour.
Hulu Chief Executive Officer said in a February blog post on the site that, with fewer ads than traditional television, the website is a more effective marketing medium.
A Hulu spokeswoman, declined to comment. A spokeswoman for Burbank, California-based Disney, didn’t respond to requests for comment.
Hulu, whose owners also include Comcast Corp.’s NBC and Providence Equity Partners, was approached by a potential buyer and is weighing its options, a person with knowledge of the situation said this week.
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.
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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