Comcast/NBC keeps Olympics after moving pitch -- with Costas' help
Comcast/NBC outbid ESPN and Fox for TV rights for four more Olympic Games
Their tear-jerking two-hour presentation included a speech from Bob Costas
NBC will add more live streaming events to its coverage of the 2012 Olympics
As the Comcast/NBC presentation neared its conclusion Tuesday morning at the International Olympic Committee headquarters in Lausanne, Switzerland, Bob Costas stepped to the front of the room to deliver the emotional highlight of the allocution.
Here was the moment to showcase the passion of NBC's rank and file to the nine officials of the Olympic committee in the room, including IOC president Jacques Rogge.
The broadcaster most associated with the Games in the United States elaborated on his own connection to the Olympics before introducing a three-minute video featuring vignettes from NBC's behind-the-scenes Olympic staffers. The group, a collection of producers, marketers and other office personnel, offered personal testimonies as to why the Olympics were important to them and their company. NBC has broadcast every Summer Olympics since 1988 (and every Winter Games since 2002) and Costas and Comcast/NBC executives kept repeating the theme during the 120-minute presentation that the Games were an intrinsic part of their network.
Said Patrick Sandusky, the chief communications officer for the United States Olympic Committee: "That film left tears in some people's eyes. It was such a human moment at a business presentation."
Comcast Chair & CEO Brian Roberts, one of 17 members of the NBC delegation, followed the video with some brief remarks and the presentation concluded with an Olympic sizzle reel featuring Michael Phelps, Usain Bolt and other great moments from NBC's years of Olympic coverage.
In the end, NBC would not have retained its two-decade hold on U.S. Olympic television rights without outbidding rivals ESPN and Fox. Its winning bid was $4.38 billion, which earned them the right to broadcast the 2014 Winter Games in Sochi, Russia; the 2016 Summer Games in Rio de Janeiro; and the 2018 Winter Games and 2020 Summer Games at to-be-determined locations. The Sports Business Daily reported that the NBC bid does not include an expected $200 million TOP sponsorship from GE, which sold NBC Universal to Comcast this year, but retains a share in the network.
"The numbers did enter into it, but I will tell you we were blown away by the presentation," said Richard Carrion, the chairman of the IOC finance committee. "The passion that this team has for the Olympic Games was very impressive and very evident to all of us. They know they have been doing this for quite a while, so we knew that they know what this is about. They know the values that are important to us and it was a combination of all those things. I'd be less than honest if I said the numbers didn't come into play, but it was all of it."
ESPN bid $1.4 billion for a two-Games package while Fox put in bids for two Olympics and four Olympics, including a $3.4 billion bid for four Games and $1.5 billion for the 2014 and 2016 Games, according to the AP and Sports Business Daily. In a conference call held after the bidding process, Carrion said the Games will cost Comcast/NBC $775 million in 2014; $1.226 billion in '16; $963 million in '18 and $1.418 billion in '20.
Now the big question is whether Comcast/NBC will air the totality of the Games live, a key component of Fox and ESPN's plans. Under longtime sports and Olympics chief Dick Ebersol, NBC's mantra was to protect the Olympic prime-time show at all costs, so it could maximize the highest ad dollars. That often meant tape-delayed coverage. But with Ebersol exiting last month in a dispute with Comcast management, NBC Sports Chairman Mark Lazarus said Tuesday that a strategic shift is in the works.
"We will make every event available on one platform or another live," Lazarus said.
Lazarus, one of 13 speakers during the Comcast/NBC presentation, also added that the London Games will include more streaming to the marketplace in real time. As for the primetime show, Lazarus said, "How we package primetime will be to make it available to garner the most viewers, the biggest groups, the shared experience of families coming together to watch the Olympic Games."
The general consensus among industry watchers was that Comcast/NBC needed the Games while Fox and ESPN merely wanted them. The Olympics offer a great engine to boost the audience of a network's cable channels and in Comcast/NBC's case, the Olympics have served as a major marketing vehicle for its morning and evening news shows and late-night lineup. The Hollywood Reporter correctly surmised that VERSUS will become a more powerful player in sports given its role in the Olympics and new deal with the NHL.
But with no Olympic Games in the U.S. at least before 2020 (the Chicago Tribune's terrific Olympics reporter Phil Hersh examined the possibilities for a U.S. city to bid for the 2020 Summer Olympics) Comcast/NBC will be challenged to make money on the deal. The network lost $223 million on the Vancouver Games and is expected to lose money on the London Games, which Comcast/NBC is paying $1.1 billion to air.
"We said all along we were going to take a disciplined approach where we would have a path to profitability," Roberts said on a conference call Tuesday. "By having a longer term, we were able to come out and achieve that goal."
On the subject of cost-effective bidding, ESPN put out a statement Tuesday afternoon, saying: "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."
Comcast/NBC celebrated its victory late Tuesday night at a 40-person dinner at the La Table d'Edgard restaurant inside the Lausanne Palace Hotel. They were joined by IOC and USOC officials for a menu that included souffled zucchini blossom among other entrees.
The mood among ESPN officials Tuesday night was hardly glum; the winning bid was clearly at a level ESPN considered fiscally imprudent. During its presentation to the IOC on Tuesday morning (Fox brought a six-person team and presented for two hours on Monday), ESPN highlighted its commitment to live coverage, its appeal to young viewers, and its multiple platforms to provide such coverage. Its presentation started early and lasted just 1 hour and 10 minutes. (The IOC asked ESPN officials two questions before thanking them for their time.) Late Tuesday night the seven-person ESPN contingent enjoyed a pleasant French dinner at Café Felix D' Ouchy after ESPN president George Bodenheimer gave Roberts a congratulatory handshake in the lobby of the Lausanne Palace Hotel. (In a fantastic scoop, the AP reported Comcast/NBC had won the bidding before Fox and ESPN were notified by Carrion that they had lost.)
Carrion predicted that the bidding would produce a higher figure than the $2.2 billion NBC paid for the 2010 and 2012 Games -- it did slightly -- and he praised the Comcast/NBC team as only an IOC member can.
"This is an Olympic competition for which there is only a gold medal," Carrion said, "and these guys won the gold medal."
Actually, the IOC won the gold medal given the amount of the winning bid. But give Comcast/NBC its own gold for coming back from Switzerland with a property Rogge said was "in their DNA."
The network of the Olympics remains the same.