$1 Billion for Olympics from European TV?

(ATR) With a deal struck to offer the European TV rights for the 2014 and 2016 Olympics to the marketing agency Sport Five, the IOC may be on its way to collecting more than $1 billion in revenue from the continent.

The agreement with SPORTFIVE, based in Germany, was announced Wednesday by the IOC. Financial details were not disclosed, but the most recent contract with the European Broadcast Union for 2010 and 2012 was figured at $740 million. In the contest for the 2014/2016 rights, the EBU was one of several bids rejected last year by the IOC as too low. Infront, a Swiss agency, was the only other finalist with SPORTFIVE.

IOC Vice President Thomas Bach, who led the negotiations, says the figure offered by SPORTFIVE will stand the test of any inquiry by the European Union. Bach says SPORTFIVE offered much more for the rights than EBU, which he says was only willing to offer an eight percent increase.

Bach says while SPORTFIVE will sell the Olympic rights to broadcasters on a country-by-country basis, the agency is still required to follow EU rules that require 200 hours of free-to-air coverage for the Summer Games and 100 hours for Winter Games, in addition to pay channels.

Excluded from the SPORTFIVE deal with the IOC are France, Germany, Italy, Spain, Turkey and the United Kingdom. The IOC will conduct separate negotiations with broadcasters in those countries; it already has reached agreements in Italy and Spain for 2014/2016.

“This agreement marks an exciting new era in the broadcasting of the Olympic Games. The IOC is committed to ensuring that as many people as possible have access to the best possible Olympic broadcast experience. We look forward to working with SPORTFIVE to make this a possibility across Europe,” said IOC President Jacques Rogge in a statement. The European rights for the 2014/2016 Olympics could be valued at more than $1 billion. (Getty)

SPORTFIVE CEO Richard Worth pledges that his company will be a strong partner with the IOC.

“Our determination is to fully uphold the Olympic ideals throughout our relationship with the IOC and to establish a broadcaster network of the highest quality and commitment."

Worth says the deal with the IOC is also possible for SPORTFIVE thanks to the financial resources of corporate parent Groupe Lagardère and Lagardère Sports. The French publishing firm reported revenues for 2008 of $10.8 billion.

SPORTFIVE is already known as the world’s biggest agent for football, representing 30 national associations and 250 teams. It is also involved in tennis, handball, triathlon, rugby and athletics.

The European rights for 2014/2016 are the first major deal for this cycle of the Games. Negotiations are under way in the U.S. but are not expected to be finalized until later this year.

Written by Ed Hula

For general comments or questions, click here