But Tuesday, Comcast responded with a knockout bid and a promise that it would show every event live, on television or online, a recognition of the immediacy of technology and a drastic reversal of NBC’s policy of taping sports to show them to the largest possible audience in prime time.
ESPN and Fox Sports also promised to carry everything live, but their bids were dwarfed by NBC’s during an auction held at the International Olympic Committee headquarters in Lausanne, Switzerland.
Comcast agreed to pay $4.38 billion for the United States media rights to four Olympics from 2014 to 2020, which eclipsed a $3.4 billion offer from Fox, a division of News Corporation. In an auction that allowed bids for two or four Olympic Games, or both, ESPN, a division of the Walt Disney Company, offered $1.4 billion for the 2014 Winter Games in Sochi, Russia, and the 2016 Summer Games in Rio de Janeiro.
Fox also bid $1.5 billion for the 2014 and the 2016 Olympics.
Brian L. Roberts, the chairman and chief executive of Comcast, said that spreading costs over four Olympics was critical to the bid, which was divided in two: $2 billion for the 2014 and 2016 Games, and $2.38 billion for the next two, whose locations have not been selected. NBC paid $2 billion for last year’s Winter Games in Vancouver (and lost $223 million) and next year’s Summer Games in London.
“We’ve said all along that we’d take a disciplined approach, where we could take a path to profitability,” Roberts said in a conference call. “It was responsible.”
Still, Comcast is paying considerably more than Fox to keep the Olympics in the NBC family than General Electric did for the Vancouver and the London Games. Neal Pilson, a former CBS Sports president, said, “I think Brian felt some pressure to validate the merger, and I think this also establishes that, as everyone felt, the Olympics were more important to NBC than they were to any other network.”
ESPN and Fox bid as if they did not feel they had to win the auction. In a statement, ESPN said: “We made a disciplined bid that would have brought tremendous value to the Olympics and would have been profitable for our company. To go any further would not have made good business sense for us.”
Craig Moffett, an analyst at Sanford C. Bernstein, said Comcast’s winning bid was out of character for a company that has been “relatively cautious.” But, he added: “I think it’s fair to say that at this price, the Olympics are going to be a loss leader for Comcast and they will have a negative effect on short-term earnings. Still, strategically, it’s possible they can pay for themselves.”
By combining NBC’s broadcast and cable networks with Comcast’s sports assets, which include the Versus sports channel, the Golf Channel and 11 regional sports networks, Roberts said he believed his Olympic investment could turn a profit. Mark Lazarus, the chairman of the NBC Sports Group, said that there were more ways to make an Olympic profit “than the old NBC was capable of doing.”
NBC’s Olympic cable coverage has in the past been on the USA, MSNBC, CNBC, Bravo and Oxygen channels. The old NBC was personalized by Dick Ebersol, who ran the network’s sports division for nearly 22 years until resigning last month in a salary dispute that was the climax of a power struggle with Comcast executives. Ebersol had been critical to every Olympic bid since the acquisition of the rights to the 1996 Atlanta Summer Games; he also engineered two pre-emptive bids within a few months in 1995 that brought NBC the rights to every Olympics from 2000 to 2008, at a cost of $3.5 billion to General Electric.
The timing of Ebersol’s departure puzzled Barry Frank, an executive vice president of I.M.G. and a former Olympic negotiator. “Why would you let Dick Ebersol go, and a month later, buy four Olympic Games, when what Dick did best, better than anyone else, is produce the Olympics?” he said Tuesday.
Clearly, Comcast felt it could could replace Ebersol in NBC’s executive suite with Lazarus, and replace Ebersol in the Olympic production control room with some of his disciples. Comcast is also ending Ebersol’s practice of tape-delaying many sports, especially the most popular ones, like figure skating and gymnastics, and more recently, snowboarding, to build a four- or five-hour prime-time program.
Even as NBC introduced online streaming, Ebersol nonetheless delayed showing some events during the 2008 Summer Games in Beijing and even more last year in Vancouver.
Article source: http://feeds.nytimes.com/click.phdo?i=460ed8a8e960b1f4a7421f33f6c9198e
Speak Your Mind
You must be logged in to post a comment.