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NBC will lose money on 2010 Vancouver Olympics

Posted by ZA on January 12, 2010

According to NBC Sports president, Dick Ebersol, the peacock is going to lose money to broadcast the Olympics for the first time in their history showing the Games.  AdAge article quoted Ebersol as saying, “…we will, for the first time in all my years at NBC, lose money on an Olympics”.  Ebersol blamed the cost to secure the broadcast rights for the Olympics and a slumping economy which hurt early ad sales.

NBC Sports paid over $800 million dollars to broadcast the 2010 Winter Olympics in Vancouver, Canada.  That amount was just below the near $900 million they paid for the 2008 Beijing Olympics.  But the Summer Olympics generate a ton more ad sales revenue than their winter counterpart.  That is why the IOC sells the broadcast rights commitment as a block of two that includes the upcoming Summer and Winter Games; you cannot buy rights to the Summer Games without taking the Winter Olympics as well.

In addition to the broadcast rights, NBC also has to spend heavily on production costs for the Olympics.  They have a staff of hundreds that broadcast from a remote location for the 2 weeks of the Olympics; some of those people have been in Vancouver for more than a year getting setup for these games.  So NBC has big costs to recoup on their Olympics production.  One key to doing so will be to build up campaigns around Winter Games athletes that get US television viewers to tune in during the Olympics.  If NBC can create interest in the athletes and sports of the Winter Games, then they will make more money on their broadcast rights.

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3 Responses to “NBC will lose money on 2010 Vancouver Olympics”

  1. It will be interesting to see if they can actually manage to recover the costs, as 800 million is not exactly a drop in the ocean. I wonder if NBC will plan on securing rights for the 2012 as well, and if it will be affected by the BBC. I can easily imagine the staff having such long-term set-up periods, I have been working in Stratford for 4 years now and the planning that has gone into it is just phenomenal.

    Kez

    • ZA said

      Kez-
      I imagine that NBC and the other potential US broadcasters are all excited about potential of 2012 London broadcast rights. But I imagine they are equally dubious of potential of 2014 Sochi Games. I expect them to reign in their spending, a little bit, for the upcoming bid process. I bet the total number falls just short of the $1 billion NBC paid for broadcast rights to Beijing 2008 and Vancouver 2010.

      ZA

  2. […] land the Olympics.  NBC has been the television partner for the Olympics since 2000, but have said they lost money to broadcast the most recently Vancouver Olympics.  Fox is rumored to have bid much less than NBC […]

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