NEW YORK - NBCUniversal/Comcast on Tuesday won the U.S. broadcast rights for the 2014 Sochi Winter Olympics and 2016 Rio de Janeiro Summer Games and the following two Olympics, beating out ESPN/ABC and News Corp.'s Fox, which had also bid for the rights package in presentations in Lausanne, Switzerland.
The price tag for the package wasn't immediately clear, but the Associated Press reported that the incumbent prevailed with an offer of more than $4 billion. Experts had predicted that a deal for four Games would carry a price tag of just above $4 billion.
The outcome of the bidding process means that the Olympics will stay with NBC, which has aired them since the 1988 Summer Games.
"People at NBC must be very happy," said Wunderlich Securities analyst Matthew Harrigan. "This shows that Comcast is committed to realizing value from the NBC network and stations long-term." Comcast acquired a controlling stake in NBCUniversal in later January.
The Olympics deal came as a surprise to some oberservers after NBCUniversal and Comcast executives had repeatedly said they would bid carefully for sports packages, including the Olympics. "It seemed like News Corp. wanted to be a serious dark horse contender, and Disney/ESPN would have liked it, too, for a change," said Miller Tabak analyst David Joyce.?
The deal is a victory for the team led by Comcast chairman and CEO Brian Roberts and NBCUni CEO Steve Burke who have a reputation for being shrewd negotiators who prefer to stay out of the limelight.?
While the price tag will be key to analysts' view of the deal, Joyce said there are benefits for NBCUniversal. "They can get positive aura effects on increased carriage rates for the networks that will eventually carry the Olympics," plus the deal could make sports network Versus a more powerful players.?
The International Olympic Committee and U.S. Olympic Committee had more than a dozen representatives on hand to hear pitches in Lausanne, including IOC president Jacques Rogge.
After a Monday presentation by Fox, earlier on Tuesday, the delegations of Walt Disney's ESPN, including its three presenters - ESPN/ABC Sports boss George Bodenheimer, Disney CEO Robert Iger and John Skipper, ESPN?s executive vp, content, and NBCUniversal/Comcast, had presented.
The 90-minute ESPN/ABC presentation and Q&A focused on what Disney, ESPN and ABC could collectively bring to the table, stressed the company?s plethora of platforms and highlighted its desire to provide live coverage, according to a source. When the delegation left, it came across the NBCUniversal/Comcast group that was gathering in the hotel, according to sources.
After everybody had their turn, suitors on Tuesday submitted sealed bids, which the International Olympics Committee then opened to make a decision.
The IOC had opened the bidding for the 2014 and 2016 Olympics, but also allowed suitors to include the following two Olympics in their offers. The IOC was believed to have been looking for offers in the $2.2 billion range, which had won NBC its previous rights deal.
However, the company lost? $223 million on the most recent Winter Games in Vancouver, which marked the first time that the U.S. network airing the Olympics didn't make money. And observers have predicted more losses for next year's Olympics in London.
Fox Sports made two offers ? one for a package of two Games and one for four, according to a source. Their price tag weren't known.
Experts have said that $1.5 billion-$1.7 billion in advertising revenue will be generated by the 2014 and 2016 Games, with network carriage fee increases and other revenue streams necessary to turn a profit.
Email: Georg.Szalai@thr.com
Twitter: @georgszalai
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Source: http://feedproxy.google.com/~r/thr/business/~3/Z866CfE6tx0/nbcuniversal-wins-rights-2014-2020-195572
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