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NBC Retains Olympics through 2020 with Aggressive Bid

June 13, 2011


NBC secured the rights to broadcast the Olympic Games through 2020 last week by agreeing to fork over a whopping $4.38 billion – nearly $1 billion more than the closest competing bid.

The Peacock handily beat out competitors ABC/ESPN (News - Alert) and Fox by bidding $2 billion for the 2014 Winter Games in Sochi, Russia, and the 2016 Summer Games in Rio de Janeiro, Brazil. ABC/ESPN and Fox came in well below NBC, bidding around $1.4 billion and $1.5 billion respectively, according to USA Today.

NBC also took part in an optional bid for the 2018 and 2020 games, whose sites have yet to be determined. The struggling network's proposal included a $2.38 billion bid for those games. Fox came in at approximately $1.9 billion, while ABC/ESPN chose to pass on the optional bid.

The Peacock's aggressive proposal turned quite a few heads considering the broadcaster lost more than $200 million during the 2010 Winter Games in Vancouver.

Speculation over whether NBC would put forth another strong bid began to gain momentum in May when longtime sports group chairman Dick Ebersol resigned. Ebersol was well known for being the driving force behind NBC's dominant reign over the Olympics for the last two decades.

Further clouding the picture was the fact that longtime Olympics supporter General Electric is no longer the majority owner of NBCUniversal. Comcast (News - Alert) took over that post in a controversial merger earlier this year.

So why did NBC make such a large bid? One reason is that the network doesn't need to make money on the Olympics for it to be a successful venture. The AP's Ryan Nakashima points out that NBC can use the 200 million expected viewers to promote new television programs and help the floundering network move out of fourth place in the rankings.

CBS used a similar tactic last year to promote its new hit “Undercover Boss” during the broadcast of the Super Bowl.

“The Olympics are a ratings builder for all other TV shows,” sports agent Brant Feldman, managing partner of American Group Management, told the AP. “NBC is a fourth-place network right now, but if you assume the programming is going to get better in the future, then the Olympics can be a jumping board to all that other viewership.”

Another reason that NBC made the aggressive bid, according to Nakashima, is based on the fact that the network has more resources and advertising opportunities than it did just two years ago. With Comcast as its parent company, NBCUniversal will have approximately 20 channels and more than 40 websites at its disposal. In contrast, the network only had access five channels and one website during the Vancouver games.

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Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell