NBC/Versus - NHL deal seen as bargaining experience for upcoming Olympic bids

[LadyStanley]

http://sportsjournalism.org/sports-...argaining-status-for-2014-2016-olympic-games/

Ebersol's first (major) deal with NHL could boost bargaining status of their bid for the 2014 and 2016 Olympics.

Click to read more...

 

[kdb209]

http://sportsjournalism.org/sports-...argaining-status-for-2014-2016-olympic-games/

Ebersol's first (major) deal with NHL could boost bargaining status of their bid for the 2014 and 2016 Olympics.

http://www.adweek.com/news/television/will-nhl-win-make-ebersol-lord-rings-130952

It certainly should go a long way toward ensuring that Sochi’s biggest attraction will be bolstered by a full contingent of NHL talent. League commissioner Gary Bettman has said the benefits of global brand exposure don't offset the revenue losses associated with the 15-day NHL shutdown necessitated when its players participate in the games' hockey tournament. With the new rights deal in hand, Bettman is likely to change his tune. Already chummy with the International Olympic Committee, anything Ebersol can do to persuade Bettman to join the party in Sochi can only bolster his standing with Lausanne.

That influence is considerable. Before the 2008 Beijing Games, Ebersol convinced the IOC to shuffle the men’s swimming schedules, ensuring that Michael Phelps' heroics would be shown live in prime time on the East Coast. Eight gold medals later, NBC’s ratings were stratospheric.

...

Last month, the IOC held meetings with the brass from the five contenders for the rights to Sochi and Rio (NBC, Fox, ESPN, CBS, and Turner Sports). In order to avoid interfering with broadcast's upfront week (May 16-19), the IOC has agreed to push back bidding for the package to early June.

Ebersol overbid for the 2010 and 2012 Olympics, to the tune of $2 billion, and NBCU lost $220 million on the former in Vancouver. Despite the misstep, Comcast should still back a bid if he can demonstrate how he’ll spin gold from the global sports spectacle. "All the competition will jack up the asking price, and that could make the Comcast guys a little squirrelly," says one network sports exec. "But this isn't Dick's first tight spot. He can be pretty convincing when he has to be."

 

[Fugu]

Did Bettman agree to Sochi too in order to get that "gargantuan" ten yr deal that gets the NHL as much money in the US as they get from a country one-tenth the size? Including all playoff games and digital rights?


What a tough negotiator!

 

[Roughneck]

I don't really see the connection. If you want leverage with the IOC offer them the most money. NBC seems good at that.

 

[MayDay]

Whether NHLers participate in Sochi or not, the ratings are not going to be good.

The games are going to be on in the middle of the night, and no one wants to watch sports on tape-delay, especially in the internet age.

I think the smashing success of the Vancouver games have set up some unrealistic expectations.

 

[Roughneck]

Whether NHLers participate in Sochi or not, the ratings are not going to be good.

The games are going to be on in the middle of the night, and no one wants to watch sports on tape-delay, especially in the internet age.

I think the smashing success of the Vancouver games have set up some unrealistic expectations.

I agree. Interestingly the Canadian NHL rights are up the same year as Sochi, which means Bell will probably be committing a lot of money to secure the 2014/2016 rights as well as trying to get the premier share of NHL rights from CBC. Just how much can Bell pay for both?

That will be the far more exciting negotiation, and when Canadian TV rights once again overtake the American ones (will they get over $300M?).

 

[He Lied to Mario]

Did Bettman agree to Sochi too in order to get that "gargantuan" ten yr deal that gets the NHL as much money in the US as they get from a country one-tenth the size? Including all playoff games and digital rights?


What a tough negotiator!

I thought that CBC was paying $100M and TSN $50M, how is that as much as $200M?

 

[MayDay]

when Canadian TV rights once again overtake the American ones

It's not a competition.

All the national TV money gets evenly distributed to all 30 teams, no matter which country they are in.

All the NHL cares about is maximizing both deals.

What I mean is, whether the American TV deal is a good deal or not doesn't depend on the value of the Canadian deal, and vice versa. US and Canada are different situations.

 

[Unstable]

Did Bettman agree to Sochi too in order to get that "gargantuan" ten yr deal that gets the NHL as much money in the US as they get from a country one-tenth the size? Including all playoff games and digital rights?


What a tough negotiator!

One tenth the size and with, what, thirty times as many hockey fans?

 

[Fugu]

I thought that CBC was paying $100M and TSN $50M, how is that as much as $200M?

TSN's deal was reported by one outlet as $50 MM per year, but another as up to $100 MM per year. RDS adds another $15 MM. But okay, we can play it your way. $165MM is 82% of $200 MM, and Canada is still one-tenth the size of the US with only 20% of the NHL teams, and one metro area that would make it to the US top 20.


Now, with that said, do you think Bettman packaged in that promise to go to Sochi with no optinos for further incentives to the NHL for shutting down for 2 weeks?

 

[LPHabsFan]

I thought that CBC was paying $100M and TSN $50M, how is that as much as $200M?

Because the Canadian TV deals are a few years old and NBC/Versus paid more than they had to now to save what they expect to be a boatload of money later. The US national tv deal I don't believe is worth 200 million a year right now. But they signed that deal so that they could get a long term deal which would mean they believe in 5 years the value of the deal will be less than 200 million a year. I'm kind of torn on whether or not it's a good business deal for the NHL.

 

[Roughneck]

It's not a competition.

All the national TV money gets evenly distributed to all 30 teams, no matter which country they are in.

All the NHL cares about is maximizing both deals.

What I mean is, whether the American TV deal is a good deal or not doesn't depend on the value of the Canadian deal, and vice versa. US and Canada are different situations.

Oh I know, I was nore just pointing out the nature of the deals. The fact that they're negotiated separately means you're going to compare them regardless and I'd say that the fact the Canadian deal expires the same year as Sochi will play a bigger role in how the Canadian TV deal gets done than the U.S. Deal having any real impact on NBC's Olympic negotiations since NBC is paying less for 10 years of NHL rights than it did for two months worth of Olympics.

 

[Spydey629]

Whether NHLers participate in Sochi or not, the ratings are not going to be good.

The games are going to be on in the middle of the night, and no one wants to watch sports on tape-delay, especially in the internet age.

I think the smashing success of the Vancouver games have set up some unrealistic expectations.

The time pendulum swings severely swings back the other way for the Summer games in Rio. Rio's timezone is only one hour ahead of the East Coast. Ebersol won't even need to play the games (pun intended) he did with the Bejing Games.

With the Summer Games being more popular than Winter, it could end up that Comcast takes a bath on the Winter Games just to make it back (and then some) with the Summer Games two years after.

 

[Kitsune]

TSN's deal was reported by one outlet as $50 MM per year, but another as up to $100 MM per year. RDS adds another $15 MM. But okay, we can play it your way. $165MM is 82% of $200 MM, and Canada is still one-tenth the size of the US with only 20% of the NHL teams, and one metro area that would make it to the US top 20.


Now, with that said, do you think Bettman packaged in that promise to go to Sochi with no optinos for further incentives to the NHL for shutting down for 2 weeks?

Fugu - Montreal would squeeze into the US top 20 too, and Vancouver might make it three by the end of this decade.

Also - a lot people figured that NBC would shy away from bidding. Interesting they didnt. The Rio games are super valuable as they are the first America's game since 96... and rio is +2 to the eastern time zone. The price will be astronimical, it'll be interesting to see how high NBC is willing to go.

 

[Fugu]

Fugu - Montreal would squeeze into the US top 20 too, and Vancouver might make it three by the end of this decade.

Also - a lot people figured that NBC would shy away from bidding. Interesting they didnt. The Rio games are super valuable as they are the first America's game since 96... and rio is +2 to the eastern time zone. The price will be astronimical, it'll be interesting to see how high NBC is willing to go.

No, I actually compiled these numbers in another thread. Montreal and Vancouver metro areas would be in the third group of ten, iirc.

Several US teams that are considered big markets are actually mid-size compared to the top ten goliaths (the LA, NYC, Chicago, Houston types), but they are still far larger than all Canadian metro areas except Toronto.

The smallest NHL cities include 3 of Canada's six: Edmonton, Ottawa and I think Calgary isn't much larger, but I don't remember off the top of my head. There are 3-4 similarly small-sized US markets-- Nashville, Buffalo, and Raleigh-Durham. I don't remember where Columbus falls in the rankings.

 

[kdb209]

Ebersol out at NBC Sports

http://www.nytimes.com/2011/05/20/sports/dick-ebersol-resigns-from-nbc-sports.html

Dick Ebersol to Leave NBC Sports
By RICHARD SANDOMIR
Published: May 19, 2011

Dick Ebersol, who has run NBC Sports since 1989 and engineered the network’s bids to acquire the rights to more Olympics than any other, resigned on Thursday when he said he could not come to an agreement on a new contract. His decision comes several months after Comcast’s takeover of NBC Universal and raises speculation that he clashed with his new corporate bosses, which he denied.

Ebersol’s departure raises immediate questions about whether Comcast will be less aggressive about acquiring the rights to the 2014 Winter Olympics in Sochi, Russia, and the 2016 Summer Games in Rio de Janeiro, which will be negotiated in Lausanne, Switzerland, in June. He said that he would not attend the auction, at which ESPN and Fox are expected to be bidders, and that he intended to stay at NBC until the end of June.

Eight years ago he made the winning bid of $2.2 billion for the 2010 Vancouver Games and the 2012 London Games. But NBC’s $223 million loss on the 2010 Olympics came at a notably bad time: less than three months after Comcast announced its deal to buy control of NBC Universal from General Electric. The Vancouver loss was by far the most for the eight Olympics on NBC in Ebersol’s tenure.

 

[danishh]

um...wow?

 

[Fugu]

http://www.nytimes.com/2011/05/20/sports/dick-ebersol-resigns-from-nbc-sports.html

His replacement:

Mark Lazarus, president of the NBC Sports Cable Group.



I'm surprised he survived this long after a $223 MM loss.


Clearly something is out of whack with the bidding for Olympic rights if you can lose that much money.

 

[Brodie]

I'm reasonably certain ABC/ESPN are going to end up with the Olympics.

 

[Fugu]

I'm reasonably certain ABC/ESPN are going to end up with the Olympics.

I personally don't really care who ends up with the broadcast. I cherry pick the events regardless.

Still, they'll need to keep an eye on how much money NBC lost, so the IOC's dreams of some ludicrous amount may not be tenable.

 

[danishh]

i think the networks try to outbid each other because of the prestige of the event.

i dont think nbc has ever profited on the olympics, this was just the biggest loss.

 

[Fugu]

i think the networks try to outbid each other because of the prestige of the event.

i dont think nbc has ever profited on the olympics, this was just the biggest loss.

Prestige at $30 MM is far different from $300 MM. They could buy a lot of advertising/PR for that much money.

Sorry, but I have to disagree, danishh. These are businesses after all, not trophy collectors. imho

 

[kdb209]

I'm reasonably certain ABC/ESPN are going to end up with the Olympics.

One problem that ESPN/ABC might have is IOC demands for near complete coverage.

Disney (ESPN/ABC) doesn't have as large a stable of cable channels as NBCU (MSNBC, CNBC, USA, etc) to carry the non-network coverage of the less popular sports, plus they have existing ESPN/ESPN2 programming commitments (MLB during the Summer Games, NBA during the Winter) that they will still need to accomodate.

 

[kdb209]

AP piece at nytimes.com:

A Breakdown of Bidders for US Olympic TV Rights

A Breakdown of Bidders for US Olympic TV Rights
By THE ASSOCIATED PRESS
Published: June 5, 2011 at 4:02 PM ET

A breakdown of the three companies bidding for the U.S. television rights for the 2014 and 2016 Olympics and possibly the following two games as well.

___

NBC

Strengths: As the longtime home of the Olympics in the United States, the network offers familiarity for the IOC and for viewers. The merger with Comcast opens up new platforms to broadcast the games.

Weaknesses: New bosses at Comcast and NBC Sports chief Dick Ebersol's resignation create uncertainty. Comcast executives, not wanting to lose money on the Olympics again, may not be as aggressive in bidding as NBC was in the past.

___

Fox

Strengths: The network offers a younger audience while still providing the platform of one of the country's big four broadcast networks. If the IOC likes the model of showing all events live unlike NBC has in the past, Fox plans to do so. Rupert Murdoch's media group has picked up the rights in other countries, showing a commitment to the Olympics.

Weaknesses: The IOC needs to decide if Fox's edgier approach fits with its image and whether it is confident the network can pull of an event of this magnitude.

___

ESPN/ABC

Strengths: ESPN offers the flexibility and reach of myriad platforms and the experience of broadcasting the World Cup. It can provide legitimacy to hard-core sports fans who may view the Olympics as less of a serious competition. The network also plans to show all events live. Parent company Disney has opportunities for marketing tie-ins.

Weaknesses: Even with the company's ability to show events on ABC, the IOC must decide if it feels comfortable with more of a shift to cable. The IOC must also determine whether an Olympics produced by a sports-specific network can reach a broader audience.

 

[kdb209]

Fox, ESPN/ABC, and Comcast/NBCU will present their bids on Monday and Tuesday.

http://www.nytimes.com/2011/06/06/sports/olympics/lowering-the-bar-in-olympic-bidding.html

Lowering the Bar in Olympic Bidding
By RICHARD SANDOMIR
Published: June 5, 2011

NBC’s Olympic reign could end Tuesday in a hotel in Lausanne, Switzerland, when it faces ESPN and Fox in an auction for the rights to the 2014 Winter Games in Sochi, Russia, and 2016 Summer Games in Rio de Janeiro.

They are familiar opponents from eight years ago, when NBC handily outbid them for the 2010 Vancouver Winter Games and next year’s Summer Olympics in London.

The International Olympic Committee would certainly like to repeat the no-doubt-about-it outcome of eight years ago, when NBC’s $2.2 billion bid (including its parent company General Electric’s Olympic sponsorship) beat Fox’s $1.3 billion offer.

But that outcome is not likely. Each network — none of which truly needs the Olympics — might be calculating the least it can bid to win, not how much would be a knockout blow. Much has changed for NBC since 2003, enough to make ESPN and Fox believe they could win in Lausanne. First, NBC lost $223 million on its Vancouver broadcast.

Second, the corporate treasury that will be tapped for NBC’s bid is Comcast’s, not General Electric’s. Third, Dick Ebersol, the head of NBC Sports and its leading Olympic advocate to his bosses at G.E., quit last month.

And ESPN and Fox are promising something that NBC, under Ebersol, never would: each would carry everything live, across all their media platforms. Ebersol built toward prime time with the most popular sports, even if it meant lengthy tape delays.

...

Fox will enter its bid first Monday afternoon in a room at the Beau Rivage Palace Hotel in Lausanne, followed by ESPN on Tuesday morning and NBC in the afternoon. Each will make a two-hour presentation in which it will extol its production and distribution. After NBC’s bid, the three media giants will attend a cocktail party with I.O.C. officials, then wait for a decision. All three can also bid for the 2018 and the ’20 Olympics, the sites of which have yet to be determined.

The amount of money the I.O.C. squeezes from the winning network could be reduced by the effect of NBC’s loss for the Vancouver Games and the likelihood that it will lose at least that much in London. (NBC paid $820 million to carry Vancouver from an advantageous North American time zone; it lost more than 25 percent of its investment.) The size of the bids could also be affected by how Fox, NBC and ESPN value Sochi, a Black Sea resort in a volatile area of Russia that is nine hours in front of the Eastern time zone.

If the I.O.C. is dissatisfied, it could ask for more bids or adjourn until another time.