Ailing NBC gambles heavily on Vancouver Olympics
By Paul J. Gough
NEW YORK (Hollywood Reporter) - NBC successfully has battled network rivals, time differences and controversy during two decades of Olympics. But on the eve of the Vancouver Winter Games, the fourth-ranked network might bow to an intractable foe: economics.
With the recession and an eye-popping $820 million rights fee, NBC and corporate parent General Electric could lose as much as $250 million.
"It would be tough for anybody," says John Skipper, executive vp of ESPN. "The current economy is overwhelmingly a factor."
NBC's troubles surprise many observers, who have gotten used to the network and its impresario, Dick Ebersol, meeting often-Olympian challenges. Vancouver is NBC's sixth consecutive Olympics, the longest streak for a U.S. network. Ad sales began slowly but are now on track. NBC Universal will offer more than 800 hours of live coverage, more than the past two Winter Games combined. There's buzz about Team USA. And the location couldn't be better unless the skating competition took place at the Rockefeller Plaza ice rink.
In 1995, when NBC spent $2.3 billion for TV rights to the 2004, 2006 and 2008 Games, it was the biggest sports-rights deal in history. The network followed in 2003 with $2 billion for 2010 and 2012. Fox Sports bid $1.3 billion; ESPN/ABC proposed a revenue-sharing arrangement with the International Olympic Committee.
"NBC thought it was worth a heck of a lot more than we did," Fox Sports chairman David Hill says. "I said at the time, 'It'll be interesting to see who time decided was more accurate in their bid.'"
"You have to wonder what possessed them to up the ante in 2003," says Rick Gentile, former executive producer of CBS' Olympics telecasts. "It's just conceivable that they bid it in a bullish economy and figured, 'Let's go for it; let's make them an offer they can't refuse.'"
NBC believed ad sales would keep pace. Its long Olympics history helped: It has cut costs with technology, uses essentially the same set and equipment since Sydney in 2000 and sends significantly fewer staffers to the Olympics than ever before. But the economy and rights fee hurt. Continued...