Canada's Robert Fagan, right, leads Germany's David Speiser,… (Robert Gauthier / Los Angeles…)
The Olympic flame will continue to burn proudly on NBC into the next decade — and it will cost only $4.38 billion.
Criticized in the past for time-shifting events to maximize ratings, NBC executives promised Tuesday, after aggressively outbidding a pair of robust competitors for the Olympic rights through 2020, that sporting events under their new contract will be shown live on either television or the Internet.
"We will make every event available on one platform or another," said NBC Sports Chairman Mark Lazarus, who added that the network will accommodate the "super fan" who needs to see everything as it happens without detracting from the prime-time audience. "We'll make sure there is enough that brings the big audience at prime time."
NBC's winning gambit, which landed the rights to the 2014 Winter Games in Sochi, Russia; the 2016 Summer Games in Rio de Janeiro, as well as the 2018 and 2020 Games in sites to be determined, came as something of a surprise.
Not only was the network facing tough competition from News Corp.'s Fox and Walt Disney Co.'s ESPN and ABC, NBC lost $233 million on the 2010 Winter Games — and many predict it will bleed red ink on next year's Summer Games in London as well. Its new owner, cable giant Comcast Corp., has been sending signals to Wall Street that profits take precedence over programming.
Furthermore, Dick Ebersol, the longtime head of NBC Sports and the architect of the network's Olympic coverage for more than two decades, abruptly resigned last month, an event widely viewed as another signal the new owners were not as committed to the Games as the previous regime.
Instead, NBC's bid eclipsed its nearest competitor by almost $1 billion. Fox had offered the International Olympic Committee $3.4 billion for the rights for the four Olympic Games; ESPN was willing to commit only $1.7 billion for 2014 and 2016 and took a pass at 2018 and 2020, according to people familiar with the negotiating process.
"I absolutely wanted to win for the team," Comcast Chief Executive Brian Roberts said in a phone call from Lausanne, Switzerland, home to the IOC. "We poured our heart and soul into it."
"The Olympics are in their DNA," IOC President Jacques Rogge said.
Although the price tag made Fox and ESPN blink, Roberts insisted the deal will make money for NBCUniversal, which will showcase the Games not only on its broadcast network NBC, but also its various cable channels, including USA, MSNBC, CNBC and the sports network Versus. (As part of its deal, NBC secured the rights to not only television, but also broadband and mobile.)
"We think this will be a profitable relationship," Roberts predicted, adding that having the Games through 2020 will give Comcast "an opportunity to build up a lot of the assets at NBCUniversal."
In past Olympic broadcasts, NBC has traditionally tried to place high-wattage events in prime time, even if they had to be tape-delayed because of time zone considerations. The rationale was that the nighttime audience is where NBC collects the majority of its advertising revenue.
However, technology has made the world smaller, and the outcomes of the events are known instantaneously from other sources, creating a demand to show more events live regardless of the time zone.
Although NBC will make future Games live on various platforms, that doesn't mean it will cut back on its storytelling format. Under Ebersol, NBC opted for a drama-heavy narrative approach that sometimes upset sports purists because it seemed to favor sentimentality over competition.
Lazarus defended the NBC style and promised the IOC more of the same.
"That was a very big part of our presentation," he said. "It's a huge part of the success of the Games and how we deliver family audiences."
ESPN and Fox expressed some surprise at the size of the Comcast bid. ESPN said in a statement, "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."
Although Comcast talked tough about being mindful of the bottom line when bidding on the Olympics, the company no doubt was also aware that it risked harming the legacy of the network if it lost the Games. NBC also uses the Olympics to promote its prime-time lineup as well as increase the value of its sister cable properties, which also carry coverage of the Games.
"I don't think these guys had any intention of being the ones who lost the Olympics," said a rival bidder.