POSTED: July 11th 2012

JOHN GOODBODY: IOC pulled off coup in selling TV rights

American rights holder NBC has beefed up their coverage across all platforms
American rights holder NBC has beefed up their coverage across all platforms

THE JOHN GOODBODY COLUMN / An authoritative and exclusive series from Sports Features Communications

July 11 - You would not think the global economy is struggling by the amount of money being paid for the global TV rights for the 2014 Winter Olympics and 2016 Summer Games. The International Olympic Committee (IOC) quickly settled a deal with Comcast, the owners of NBC in the United States, to pay $4.38 billion for the next four Olympics after 2012. The IOC then turned its attention to other parts of the world, finalising contracts with companies in Japan, Korea, host of the 2018 Winter Games, and also Brazil, which will stage the 2016 Summer Olympics.

Even more significant has been the increase in fees obtained from Europe. This month’s Games in London mark the end of the traditional arrangement with the European Broadcasting Union (EBU), whose members have negotiated, as a group, to buy the free-to-air rights. For 2010 and 2012, this was $700 million. Instead the IOC has launched a two-pronged attempt to raise more money from its second most important market, after the United States, for the Olympic rights.

For 40 of the less important commercial countries, it sold the rights for the next two Games to Sport Five for about $340 million, leaving the agency with the task to tie up the contracts. The IOC then negotiated directly with the main markets: Germany, France, Spain, Italy, Turkey and the United Kingdom, believing, quite rightly as it has turned out, that it could get more money than dealing solely with the EBU.

France has paid about $125 million, Germany $190 million, Spain $103 million, and Italy (through a deal with Sky Italia) $220 million. So already, without the income from Turkey and the United Kingdom, the total is $978 million, well up on the EBU figures for 2010 and 2012.

The situation in the United Kingdom is interesting, particularly because London is staging the Games this month and because of the evident enthusiasm for the Olympics among the population. The Games have to be shown on free-to-air television because the Olympics are one of sports ‘crown jewels’, which are protected by government legislation.

For years, the BBC has covered the event; in 1948, when London last hosted the Games, it paid the organisers just 1,000 guineas (less than $4,000 in the exchange rate of that day), although it is believed the cheque was never cashed. For some Games, such as in 1980, Independent Television (ITV), also a member of the EBU, went head-to-head with the BBC, until it realised that it would always lose out in the ratings’ battle.

The IOC regards the work of the BBC highly but has sent tender documents to the other terrestrial broadcasters, including ITV and also Channel 4, which will screen the 2012 Paralympics. Negotiations are going on at the moment and it is expected that a deal will be announced by the time of the Opening Ceremony on July 27.

The BBC must be favourites. However, the Corporation, which is funded by everyone who pays a licence fee to own a television set in the United Kingdom, is currently having to undertake a 20 percent cut in costs. For the 2010 and 2012 Games, it paid only $92 million dollars and clearly it will have to raise this amount for 2014 and 2016. ITV or Channel 4 may bid more but the BBC has one trump card in the negotiations. It has a large number of platforms for the Games, including extensive domestic radio outlets and the IOC likes to see the rights-holder give extensive coverage to the Olympic sports, which the BBC certainly does.

Even if the BBC does not pay a great deal more for 2014 and 2016, the IOC can be satisfied that it has done exceptionally well in the television negotiations so far for future Games, thereby helping to protect the future of the Olympic Movement.

** JOHN GOODBODY covered the 2008 Olympics for The Sunday Times, his 11th successive Summer Games and is the author of the audio book A History of the Olympics, read by Barry Davies, the BBC commentator. He was Sports News Correspondent of The Times 1986-2007, for whom he received journalistic awards in all three decades on the paper, including Sports Reporter of The Year in 2001.

Keywords · John Goodbody · IOC · TV rights

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