New Chapter for Olympics on U.S. TV

The Last Time Around

If the procedure is the same as the one used for the last round in 2003, aseries of preliminary meetings would be held with all the interested parties to establish a protocol. According to reports, the IOC and ESPN are meeting this week in Madrid,and NBC and Fox have already held similar meetings. The IOC Commission on TV Rights and New Media, chaired by Rogge, would then meet in Lausanne, inviting presentations from each of the U.S. broadcasters followed by sealed bids.

In 2003, ABC/ESPN, Fox, and NBC were the three bidders; CBS dropped out shortly before the bids were submitted. The decision took only a few hours to reach. Fox reportedly offered $1.3 billion, while ESPN proposed a revenue share.

NBC’s record-shattering bid -- which was within the range the IOC had advised it was looking for -- was accepted; in previous rights fees negotiations, the IOC has come back to broadcasters and asked for an increased bid.

NBC also sweetened its bid with a $200 million TOP Sponsorship for GE. The move was innovative and one of the factors that tipped it in NBC’s favor. Although GE could still renew its sponsorship, the deal may not have a major influence on the TV deal.

The Competition

Industry insiders say ESPN’s success in telecasting the World Cup from South Africa was a test run for the Olympics, with all programming live rather than tape-delayed for prime time. Showing the Olympics live during the day, however, would hurt ESPN’s prime time number, and thus, the amount it could charge for prime time advertising.

But ESPN has so many other properties, insiders say, that the Olympics are still more important to NBC -- which includes its Olympic logo on much of its programming -- than to ESPN.

CBS teamed with Turner Sports for the 1992through1998 Winter Olympics, and recently on a new 14-year, $10.8 billion deal to broadcast the NCAA basketball tournament.

But like ESPN, the Olympics is not a franchise the way it is for NBC.

Fox is the wildcard, as it often is.

In 2003, Fox was making a spirited public play for the Games. When the bidders arrived in Lausanne, rumors wererampant that Fox founder Rupert Murdoch was flying in on his private jet to make a big preemptive strike. It turned out that Fox was really just trying to drive up the bid. According to Olympic lore, Chairman David Hill’s instructions were, "If you win, don’t come home."

Fox already has the rights to the 2014 Super Bowl and there could be a conflict with the Olympics if the NFL prolongs its season to accommodate 18 regular-season games. That could also affect other networks, which would be leery of airing the Olympics opposite the NFL championship, the top-rated sports telecast in the U.S.

Bid for Two Olympics or Four?

While Rio de Janeiro is an attractive locale and time zone for the U.S. broadcasters, "Sochi is about the worst time zone you could possibly have for the American market," says one insider. "I understand the IOC’s stance, but you have to really wonder where they think that value’s going to come from."

Carrion said the IOC may accept bids for the next four Olympics, 2014 through 2020, which an insider calls "a sound strategy." The IOC doesn’t have to accept a four-Games bid if the numbers aren’t high enough, but the expanded bid may give broadcasters a little more security in that they have a longer franchise. The bidders also can insulate themselves against a significant increase for the second pair of Games.

However, PyeongChang, the current favorite for the 2018 Olympics, also is "not the most attractive location for the Winter Games either when it comes to American sponsors and viewers," says an insider.

New plans for the controversial U.S. Olympic Network could also be an offshoot of the negotiations, especially in light of the improving relationship between the U.S. Olympic Committee and the IOC.

But says one insider, "For all the enhancements that are always included in an Olympic bid process, the promises made for certain programming, the bottom line comes down to who is willing to bid the most money."

Written and reported by Karen Rosen.