POSTED: May 14th 2014

JOHN GOODBODY: Record IOC NBC Olympic TV deal benefits everyone

NBC and the IOC go back to Seoul 88 / Leonard Zhukovsky Bigstock
NBC and the IOC go back to Seoul 88 / Leonard Zhukovsky Bigstock

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

(SFC) It may be the TV sports deal of the first half of the 21st century –but to whom? That was the question that was being asked when the International Olympic Committee (IOC) announced last week that it had signed an agreement for the U.S. rights with NBCUniversal (NBCU) to screen all Olympic Summer and Winter Games between 2021 and 2032 for $7.7 billion, inevitably the highest figure in history.

First of all came the surprise that the IOC should have acted so swiftly during the new presidency of Thomas Bach and also committed itself so far ahead in the future when it is uncertain exactly what the television market-place will look like in almost 20 years’ time. For many years, the U.S. rights were a fierce battle between the three networks, NBC, ABC and CBS, with envelopes containing sealed bids being opened by the IOC.

However, since 1988, NBC has always screened the Games and it may well be that the IOC have realised that the interest of ABC and CBS has diminished over the last three decades and therefore instead of taking a chance that it might be rekindled, the IOC feels it was bound to negotiate only with NBC, the network that has now become its established partner. The IOC also has a policy of selling its rights to the broadcaster that can guarantee the broadest coverage, which in the United States is one of the three networks.  Given that NBC is the biggest financial supporter of the IOC, it would therefore make sense to strike a long-term deal, which would ensure stability to the Olympic Movement.

When one looks back over the last 60 years, it is remarkable just how much income from television has grown. In 1948, the BBC agreed to pay 1,000 guineas ( $600) for the exclusive rights to the London Games but the cheque was never cashed because the Organising Committee, under the chairmanship of Lord Burghley (celebrated in the film ‘Chariots of Fire’) was concerned about causing financial hardship to the BBC. Even by the 1960 Games in Rome, the total television revenue from the 21 countries screening the Games was a mere $1.2 million, whereas in 2012, for the Summer Games in London it had risen to $2.6 billion (b).

For NBC, the contract consolidates its position as the Olympic channel in the United States and probably would aid its budgeting and ability in negotiating long-term advertising agreements. Having secured the Games over so many years, it further decreases any lingering interest of ABC and CBS, as well as any intermediary organisation, who might try to secure a deal with a cable company in conjunction with a network.

For the IOC, the size of the deal gives it the parameters for its TV negotiations with all the other countries in the years to come. In the 1998-2000 television agreement, the United States paid $1.1 billion and Asia and Europe, the next two biggest markets, $630 million between them. For 2010-12, the figures were $2.1 billion and Asia and Europe a total of $1.4 billion.

So the gap has marginally narrowed and the task of the IOC is now to try to narrow the gap still further. China, in particular, is one country from where more revenue might be earned, given its vast population and booming economy.

The biggest international sports deal of this century therefore looks to have benefitted both NBC and the Olympic Movement.  Following the success of Sochi, Thomas Bach must be gratified that his presidency has had such a heartening start.

** JOHN GOODBODY covered the 2012 Olympics for The Sunday Times, his 12th 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 · Olympics · tv rights · IOC · NBC · John Goodbody

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