Broadcast giant quits NBC: what next for Olympics?

June 6 and 7 could be among the biggest days on the sports business calendar in 2011. They'll definitely be among the most important for the beancounters at the International Olympic Committee.

That's when American networks will be in Lausanne, Switzerland to make their bids for the rights to broadcast Sochi 2014 and Rio 2016. They may even look for a bulk discount by tendering bids on Winter 2018 and Summer 2020.

Munich, Germany, PyeongChang, South Korea and Annecy, France are bidding for 2018. The 2020 race has yet to begin.

NBC, which paid $2.2 billion for Vancouver 2010 and London 2012, is the incumbent. The former GE-owned broadcasting giant has held rights to all Summer Games since Calgary 1988 and Winter Games since Salt Lake 2002. But it will be without Dick Ebersol.

Ebersol dropped a broadcasting bombshell May 19 when his resignation from NBC was announced. NBC is now owned by Comcast and the official word is they couldn't agree on a new contract. The news broke exactly a month after Ebersol announced NBC and Versus's 10-year, $2 billion National Hockey League broadcast deal at a news conference with NHL commissioner Gary Bettman.

Ebersol's Olympic journey began in 1967 when he joined ABC as a researcher. Ebersol and Canadian Lorne Michaels collaborated to create Saturday Night Live for NBC in 1975. During Olympic Games, Ebersol would actually camp in custom-made quarters in NBC's facilities at the International Broadcast Centre instead of stay in a hotel room. Ebersol spoke at length about his storied career during the Denver 2009 SportAccord convention.

Ebersol enjoyed his Vancouver experience so much (and the fact that the British Columbia government became an important advertiser) that he appeared in a video honouring outgoing Premier Gordon Campbell at a Vancouver Board of Trade event on Feb. 4, 2011. NBC lost $223 million on Vancouver 2010 after being hit by the Great Recession's advertising slump.

Whether NBC's London 2012 coverage will suffer without Ebersol at the helm remains to be seen. He has many proteges who will now run the operation. NBC, sans Ebersol, said it still plans to go to Lausanne and bid for the Olympics broadcast rights, but it will be a hotly contested race with Disney-owned ABC-ESPN, Fox and CBS.

A source told me Ebersol has been bearish on a bid for Sochi 2014 for quite some time. The unfriendly time zone -- eight hours ahead of New York -- was the biggest worry. Live sports are best shown live, but not at 3 a.m. when viewers would rather be sleeping. During a meeting, Ebersol was asked what he thought Sochi would be worth. He paused for a moment and scribbled on a note pad. He turned around and showed those in the meeting. It was a big "0".

Sochi 2014 could well be a commercial bust for the IOC and whichever company wins the U.S. rights if National Hockey League players aren't playing the hockey tournament. The Russian resort is building everything from scratch and, from what I saw last June, is on-track to be ready for February 2014. But volunteers, venue operations, transportation and security remain big unknowns for Sochi, which passed the 1,000-day countdown on May 14.

IOC back to business with first 2011 meeting

The International Olympic Committee's Executive Board met Jan. 13 at the five-ring headquarters in Lausanne, Switzerland -- 11 months after the Vancouver 2010 Winter Olympics and one year before the 2013 Youth Olympic Winter Games in Innsbruck, Austria.

Executive Board doesn't release minutes. No information was released on whether VANOC was discussed behind closed doors. The Vancouver 2010 final report will be delivered to the 123rd IOC session July 1-9 at Durban, South Africa. That is where the host of the 2018 Winter Games will be chosen from among either Annecy, France, Munich, Germany or PyeongChang, South Korea. Only three bids were received. By comparison, there were eight candidates for the 2010 Games.

Executive Board added to the minimum requirements for cities to bid on the Games. The prospective host national Olympic committee must be compliant with the World Anti-Doping Agency and accept the jurisdiction of the Court of Arbitration in Sport to settle disputes.

"Without that there is no candidature," Rogge said.

Executive Board also decided there could be "a waiver for the rule of the dates of the Games because of climactic and geographic issues," Rogge said.

But would the IOC move the 2022 Winter Olympics if FIFA decides to hold the 2022 Qatar World Cup in January?

"We have not had contacts with FIFA for the very good reason this is a very hypothetical discussion, FIFA has not yet taken the decision in principle to shift to winter months.

"The situation for the IOC is very clear: the IOC would organize the Winter Games in the winter obviously. The bracket we're having is roughly, last week of January and the month of February. There is no way you can organize Winter Games in December or in March.

"For us it's clear that is the bracket for the games. It would be sensible once a decision would be envisioned by FIFA, to sit around the table to see it is not harmful for either of the two partners.

"As of today we think it is far too premature."

Otherwise, how are IOC and FIFA relations after FIFA president Sepp Blatter accused the IOC of being a non-transparent organization that handles its finances like a "housewife"?

"The incident that arose is closed, it is the past, I don't think about it and I'm very glad the relationship is very good," Rogge said.

Rogge admitted the IOC is probing allegations of corruption against Issa Hayatou, who is an IOC member and FIFA vice-president. Andrew Jennings reported that Hayatou was among those involved in the ISL bribery scandal in the 1990s during the FIFA's Dirty Secrets documentary aired by Panorama in December 2010:

"We have referred this to the Ethics Commission of the IOC and the Ethics Commission is collecting information, they are discussing with the BBC. I believe that the BBC, under the condition that the identity of the sources would be preserved, would be willing to give information, and we need that information."

That Ethics Commission saw Spanish ambassador Jose Luis Dicenta Ballester replace former United Nations secretary general Javier Perez de Cuellar.

If Tottenham Hotspur FC wins the bid to take over the London Olympic stadium after the 2012 Games, it might demolish and rebuild on the same site. Rogge said "this is not our business" because it is a matter for LOCOG, the Olympic Park Legacy Society and U.K. Athletics.

"If a solution could be found for the track, we would be happy," he said. " Don't expect the IOC to intervene forcefully anyway in this issue where we are not responsible."

Rogge said discussions with the United States Olympic Committee over revenue sharing are accelerating. A truce was announced at the 2009 SportAccord convention in Denver. Smaller NOCs want a bigger piece of the revenue pie, but the USOC argues that American broadcasters and sponsors are the biggest funders of the IOC.

Rogge said "pretty soon" the IOC would meet with American broadcast companies about bidding for rights to air the Games of 2014 and beyond.

"After that meeting then there will be a decision how we are going to tender out , what the format and specifications are going to be," Rogge said.

The IOC normally sells packages in pairs, but U.S. companies want to buy four at a time if the price is right. NBC is the incumbent. It paid $2.2 billion for Vancouver 2010 and London 2012.

The IOC's finances are "solid" with reserves of US$550 million.
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Peacock plucked in Vancouver

Speaking of NBC, the Peacock network lost $223 million on its Vancouver 2010 coverage, according to the April 16-released quarterly report.

That’s $27 million better than the worst-case scenario, but $23 million worse than the original $200 million estimate of GE CEO Jeff Immelt.

NBC paid $2.2 billion for the Vancouver/London package in 2003 when the advertising market was rosier. A not-so-funny thing happened on the way to Vancouver, called the recession. The last time the Olympics were in a North American time zone was Salt
Lake 2002 when NBC made a $70 million profit.

The Games did bring $800 million in revenue to GE and the ratings were 14% higher than Turin 2006.

ESPN/ABC and FOX are readying to bid for Sochi 2014 and Rio de Janeiro 2016. Will NBC match their offers? s

Record numbers forecast for Vancouver, but not record profits

The International Olympic Committee’s marketing director estimated 3.5 billion viewers would experience some of Vancouver’s 2010 Winter Olympics.

Timo Lumme said more than 300 broadcasters in 200 territories delivered the first all high-definition Winter Games to TV viewers. He said the total amount of content delivered was 50,000 hours, which is more than Salt Lake 2002 and Turin 2006 combined.

“In four short years from Torino to Vancouver we’ve had a continuing digital explosion,” Lumme said. “We now have the same amount of hours globally covered on digital media, Internet and mobile, as we have on the old media, broadcast.”
In Canada, a record 22 million people were watching when Sidney Crosby scored the gold medal-winning overtime goal in the hockey final. CTV reported average prime time viewership of 5.8 million.

The ratings were in record territories, but the recessionary Games won’t translate to record profits because of the advertising slump. NBC parent General Electric already announced in December that it would lose $200 million because of Vancouver 2010 and is being coy about its post-London 2012 plans. NBC Olympics chief Dick Ebersol is bearish about Sochi 2014, mainly because it's eight hours ahead of New York. Fox and ESPN have mulled bids.

Also in December, CTV Olympics president Keith Pelley said the aim was to break-even. CTV bid US$153 million five years ago for 2010 and 2012 rights, more than double the CBC contract for US$73 million for 2006 and 2008.

"We've said what we're going to say about the economics leading into the Games. Now we're totally focusing on the actual Games and we'll address the consolidated numbers shortly thereafter,” Pelley said during the Games.

The IOC promised VANOC a roster of 11 global sponsors, but it stalled at nine and no new deals were announced in Vancouver. Last summer, the IOC pledged to help VANOC with losses up to $22 million unless the gap could be narrowed through other means.

The B.C. government is the ultimate guarantor and launched a $38 million tourism ad campaign before the Games. The You Gotta Be Here out-of-home ads took up substantial space in the Olympic city and at transit stations, filling space that would have been used by private sponsors had the recession not happened.