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Posts Tagged ‘Olympic broadcast rights’

IOC pays price for picking Rio over Chicago

Posted by ZA on March 1, 2010

The International Olympic Committee (IOC) had to balance a lot of factors in selecting Rio de Janeiro as host city for the 2016 Summer Olympics over Chicago (and Barcelona & Tokyo).  They had to consider which location had the facilities and infrastructure, they considered which city/country/continent was deserving (South America has never hosted an Olympics) and of course they had to consider which candidate would help the bottom line.  Their financial considerations likely included which host city could bring lucrative sponsors and broadcast dollars.  And while the potential pool for sponsors is global and the IOC sells broadcast rights to a multiple countries, the right host country will greatly increase the financial potential.

As the IOC begins negotiations for broadcast rights on the 2016 Olympics, they may finally be having a twinge of regret at not selecting Chicago as host city.  That is because the IOC’s initial discussions with U.S. based broadcast rights partners has met with “tepid response“.  The potential U.S. broadcast partners are already working on bringing down the IOC asking price.  A normal negotiating tactic?  Sure, but keep in-mind that NBC paid $2.1 billion for the 2010 & 2012 broadcast rights.  That is the bar the IOC wants to surpass, but it seems unlikely they’ll be able to with the 2014 games in Sochi and 2016 in Rio.  Winter Games don’t normally draw the big bucks like the Summer Olympics, as evidenced by the rumored $200 million that NBC will lose to broadcast the Vancouver Olympics, so Rio is the big ticket item.

Rio will surely be a fantastic host of the 2016 Olympics and they will open up plenty of new opportunities for the Olympics in South America.  New sponsorships and new broadcast partners will be brought into the IOC family.  But even with those positives, the IOC is now realizing that Chicago would have been a cash cow.  If Chicago were the host city of the 2016 Summer Olympics, all of the major U.S. sports networks would be lining up to set the record on broadcast rights paid on an Olympic games.  Chicago would have likely netted a broadcast rights deal north of $2.5 billion, which is the new mark the IOC and Rio have to try to surpass.  If they don’t the IOC might for the first time have some regrets over picking Rio over Chicago.

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