Multibillion-Dollar Decision Looms for Comcast Over Olympic Rights Bid
Now that Comcast is close to getting regulatory approval to merge with NBC Universal, observers are asking whether the company will shell out to keep the Olympics on NBC.
As early as spring, Comcast could face ESPN, Fox and a potential bid from the combined duo of CBS and Turner Sports to buy media rights to the 2014 Winter Games in Sochi, Russia, and the 2016 Summer Games in Rio de Janeiro, the New York Times reports.
But will the company pony up for the rights to the Games, an expensive but sure-fire ratings generator?
"I don't think Comcast wants its first move with its new partner to be a negative one and to lose something NBC has had for years," IMG executive vp Barry Frank, who has negotiated Olympic deals in the past, told the Times.
Comcast could stand to gain from keeping the Games in more ways than one. The company already owns sports channels Versus, the Golf Channel and 11 regional sports networks, and could expand Olympics coverage to those entities, as NBC Universal has spread its coverage across its various broadcast and cable networks.
And, as the Times notes, Comcast chairman Brian Roberts is himself a champion athlete, winning four silver medals and one gold in team squash at the Maccabiah Games, and has attended the Olympics.
However, the Games don't come cheap: Current NBC Universal parent General Electric paid $2.2 billion for the 2010 and 2012 Games along with a global sponsorship, and International Olympics Committee president Jacques Rogge has said he wants more money in the next bidding cycle.
Network executives told the Times they don't believe the Sochi Games will be worth as much as the 2010 Vancouver Olympics (which cost $820 million) because of its relatively warm winter climate, but NBC did lose $223 million on Vancouver partly because of the recession and partly because of the high price it paid to cover them.
Comcast executives are "eager to show they can make money running NBC, and the Olympics may not be a way of doing it," Sanford C. Bernstein & Co. analyst Craig Moffett told the Times.
Meanwhile, former NBC Universal chairman and CEO Bob Wright told the Times that Comcast doesn't need the Olympics to be successful.
"I don't think anybody at this stage thinks they have to have the Olympics to survive, or that the Olympics will change their business model in a significant way to take a big business risk," said Wright, who now serves as an adviser to Lee Capital Partners.
NBC and Comcast officials declined to comment to the Times.