IOC Weighs Coverage, Cash in Bidding for U.S. TV Rights

(ATR) The competition for U.S. television rights to the 2014 and 2016 Olympics should start to "heat up a bit" next month, and the use of new technology in network coverage plans will be a contributing factor along with cold, hard cash, says the IOC’s lead negotiator.

Richard Carrion tells Around that Ringshe hopes to get the process started in May, with a deal concluded before the IOC Session in Durban, South Africa, begins in early July.

In 2003, the last time U.S. rights were up for grabs, the process took six to seven weeks. Carrion, head of the IOC finance commission, expects interested bidders to again come to Lausanne and "give us their thoughts on how they would do the coverage, what they bring to the table," he says.

"And, of course, the envelopes (with the sealed bids) are also extremely important."

Both Carrion and IOC president Jacques Rogge have said they expect rights to exceed the record $2.2 billion NBC paid for the 2010 and 2012 Olympics.

The IOC has held preliminary meetings with interested parties but has no confirmation on who will see the process through to the end. In 2011, all four major networks – NBC/Comcast, which has been the sole U.S. broadcaster since 2002; ABC/ESPN; CBS and Fox expressed interest – but some executives have since tempered their enthusiasm.

Unlike 2003, this time the broadcasters already know the sites – and time zones – of the Games on the auction block: Sochi in 2014 and Rio de Janeiro in 2016.

Live or Tape?

Expect immediacy to be a topic of discussion. NBC has enjoyed success with its storytelling framework, sometimes tape-delaying popular events to show them "plausibly live" in prime time. ESPN, on the other hand, plans to show all Olympic events live.

"We think value continues to go toward events that are live and events that have the drawing power that this event does," says Carrion, IOC member from Puerto Rico.

While television has evolved with high-definition and 3D technology, people are also increasingly consuming news and entertainment on computers, smartphones and tablets like the iPad, bringing more platforms into play.

"We have always prided ourselves that the Olympics are a proving ground for a lot of technologies, so we would like to see a lot in that sense," Carrion says. "We know this is an area that the sports fan and the viewer is getting more and more choices now and more information, and the more of that we can do to enhance the experience, the better it will be."

Showcasing New Technologies

High-definition broadcasting has "dramatically altered the coverage," Carrion says, adding that sports is the best showcase for new technologies and the Olympics is "an event that transcends sports."

"I think all these companies are grappling with this," he says. "What’s the right technology to deploy? How do you program for all of these different devices?"

Carrion believes tablets are going to be the "key screen," while smartphones will also continue to increase their market share.

"People want mobility," he says.

Monetizing these platforms is the crucial question.

"The whole landscape is evolving," Carrion says. "The technology has created more viewers, more possibilities for people to view it comfortably, and that can only be favorable."

Appealing to youth by adding sports that interest them also adds value. The IOC is in the midst of deciding which sports and/or events will be added to the Sochi program.

"It poses a challenge for the organizers, for the federations, but this is the future," Carrion says. "We’ve got to tune in to that. People want to see new things, particularly the things that are attractive to the young people now. Clearly that has a commercial value as well, but I am more concerned longer run with maintaining the program relevant and fresh."

He adds, "It’s crazy to hear these words from the head of the finance commission, but the commercial aspects are really secondary to me if we get the program right. If we get a fresh program, I think eventually the commercial side will follow. That’s not the driving force."

How Much Will USOC Receive?

The television rights fee goes hand-in-hand with IOC negotiations with the U.S. Olympic Committee about revenue sharing. The USOC currently receives 12.5 percent of the TV rights fee, which critics have argued is too much.

Carrion is part of a committee chaired by IOC vice president Gerhard Heiberg that will meet during SportAccord with representatives from the USOC, including chair Larry Probst.

"We’re going to have some time together," Carrion says. "I don’t know that there’s any momentous announcement, but I will tell you the relationship is much improved.

He praised Probst and CEO Scott Blackmun for the positive turnaround.

"To be frank, I didn’t exactly get off on the right foot with Larry, but I have to tell you we’re on a good footing right now," Carrion says. "I know they’re making a genuine effort, so hopefully that translates into a meaningful agreement, but we have time for that."

The original plan was to hammer out a new agreement in 2013 – although it would not take effect until 2020 – but both sides indicated a willingness to speed up the process.

"I think we’ll get something done before then, if not this year, then next year," Carrion says. "It’s an irritation, but we need to get it off the table."

Written by Karen Rosen.