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.
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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.