01 cover sbi 152.indd - FIFA/CIES International University Network

MEDIA
Current Major US TV Deals
NFL
NBA
NCAA
Major League Baseball
NASCAR
Olympic Games
worth noting: the emergence of ESPN/ABC as a
committed bidder and the likely acquisition by
Comcast of General Electric’s NBC.
Up first is ESPN. The Connecticut-based giant
has not been shy in announcing it will bid for 2014
and 2016 and recently tipped its cards even further
by scooping the Vancouver 2010 and London
2012 broadcast rights in Argentina, Bolivia, Chile,
Columbia, Ecuador, Paraguay, Peru and Uruguay
(and satellite-only rights in Venezuela).
ESPN’s executive vice president of content,
John Skipper, attended the Beijing Games and
brought with him a team of seasoned executives
that had long been crunching Olympic numbers.
He knew only too well that the IOC receives
approximately half of its revenue from media
rights and the US portion has traditionally been
greater than the rest of the world combined.
It gives a global player like ESPN (owned by
Disney) notable leverage. Perhaps the only other
Phelps helped exonerate Ebersol- Getty Sport Images
At least $28.34-billion over eight years (through 2013) with Fox, CBS, NBC, ESPN
and Direct TV
At least $7.44-billion over six years (through the 2015-16 Finals) with ESPN/ABC,
TNT, Direct TV, Dish Network and iN Demand
At least $6-billion over 11 years (through 2013) for up to 66 collegiate
championships with CBS, ESPN and Direct TV
At least $4.87-billion over seven years (through 2013) with Fox, ESPN, TBS, Direct
TV, Dish Network and iN Demand)
At least $4.8-billion over eight years through 2014 with Fox, ESPN/ABC, TNT and
Speed Chanel
At least $2 billion (for the Vancouver 2010 and London 2012 Games) with NBC
Universal
party to bring a similar big picture orientation is
Murdoch’s various Fox platform.
Translation: ESPN (or possibly Fox) can
amortise its US investment (i.e., paying a premium
in one country) by averaging out its investment via
other territorial purchases.
NBC has long been the rights holder in
the US and long appreciated by the IOC. “The
Peacock” is also fronted by NBC Sports chairman
Dick Ebersol and, as 2009 was wrapping up,
Ebersol was verbal about the growing overtures
by Comcast and the strong possibility the two
companies would complete a deal by early 2010.
As this issue went to press (mid-November) that
acquisition looked imminent.
Interestingly, much has been made of the
suggestion (or fact) that NBC overpaid for the
2008 Games in Beijing. But in return, Ebersol
received morning swimming finals (featuring
Michael Phelps) so the action would be seen live
in prime time in the US. When Phelps delivered,
the ratings went through the roof and Ebersol
was exonerated.
For the IOC, the continued delivery of the
Games, stage-managed in a carefully-crafted love
letter from Ebersol to the American public - truly
benefitting the IOC and its values - cannot be
underestimated.
Translation: Richard Carrion, the IOC’s finance
commission chairman, would logically recommend
taking the highest bid. But (and these are significant
disclaimers) if Comcast buys NBC because it wants
to establish itself as a major sports force in the US
(to rival ESPN) … and bids aggressively … and if
Comcast is able to keep Ebersol engaged beyond
London 2012 … and if Ebersol is asked to remind the
IOC bid evaluators of his personal contributions in
growing the Games in the US then the Comcast/NBC
package, if particularly creative, might receive extra
attention and could win despite slightly less dollars.
So when will the IOC go to market A
successful Winter Olympics in Vancouver for
NBC (in terms of ratings, ad inventory sold,
overnight, final ratings and critical appreciation
by the media) could create favourable timing for
the IOC anxious to bring Comcast and ESPN
into a head to head showdown by June.
On the other hand, by waiting for US market
conditions to continue improving and by more
fully priming the pump with Fox and CBS, the
IOC might truly get four legitimate bidders.
Admittedly, not all four networks will bid
with real intent (meaning at least one will likely
submit a stalking horse bid) but for the IOC to
get four major players to the table may outweigh
the benefits of a early bidding process.
It would also allow IOC’s administration to
believe that selecting Rio was just as viable as
selectin Chicago.
There is no doubt that Chicago’s loss cost
the IOC money and Carrion acknowledged
as much immediately following the vote in
Copenhagen. The question remains what the
discount percentage will ultimately equal. By
selecting Rio, could the IOC have missed out on
maybe as much as an extra $500-million from
US broadcasters
No one will know for sure but in his book
Rome 1960, author David Maraniss noted that it
is not uncommon for the IOC president to feel
the pangs of revenue lost. Current IOC president
Jacques Rogge will want his fine legacy enhanced
by a great gathering of financial spoils from the
Americans. Odds are that if his negotiators do
their jobs well, the Sochi-Rio Express will bring
in at least $2-billion. It is doubtful the bidders
will overpay but one never knows at an auction.
Money is a quirky commodity.
Rick Burton is the David B. Falk Professor of Sport
Management at Syracuse University and a former
chief marketing officer of the USOC.
SportBusiness International • No.152 • 12.09 21