Can NBC/Comcast Make Money Off Olympics?
NBC/Comcast won the rights to the 2014, 2016, 2018 and 2020 Olympic Games on Tuesday. The price? $4.38 billion. That's $64.41 million per Olympic broadcast day. That's a lot of money to make up.
Can they do it?
Well, just because NBC Sports lost $223 million from Vancouver, a games that they paid $820 million for, doesn't mean that it's impossible. And with a changing landscape and the combined power of NBC and Comcast, who really knows?
Comcast obviously ran the financials before bidding and company CEO Brian Roberts told the media at the announcement in Lausanne, Switzerland, that this would be a "profitable relationship."
Investors seemed mixed about the news.
After news of Comcast's win was reported, shortly before 1 p.m. ET, shares dropped about 0.7 percent before rebounding .
By 3 p.m, they were hovering around session lows, even though they still closed up on the day.
Shares of parent company Disney rose after the news that ABC/ESPN didn't get the rights to the games before falling later in the day as well. Disney's sports properties had bid a combined $1.4 billion for the only the 2014 and 2016 games.
While many believed that ABC/ESPN would make a huge play to get the Olympics, there was definitely a number that the network wasn't willing to go beyond.
On Disney's second quarter conference call last month, CEO Bob Iger said this:
"While ESPN certainly intends to take a look at the Olympics seriously, ESPN has also demonstrated a great ability to walk away from opportunities that they didn't believe made sense from a bottom-line perspective," Iger said. "And they've also demonstrated an ability to divest certain rights that they feel weren't driving the value that other rights could have."
Fox's bid for the 2014 and 2016 games came in at $1.5 billion and at $3.4 billion for a four-games bid, which means that they were almost $1 billion behind Comcast in total money.
Only time will tell if NBC/Comcast team is right. What they do have no matter what, between the recently acquired NHL rights and now the Olympics, is 10 years worth of major sports programming.
Network Fees for Summer Olympics
|1968||Mexico City (ABC)||$4.5M|
|1984||Los Angeles (ABC)||$225M|
|2016||Rio De Janiero (NBC/Comcast)||$1.226B|
Network Fees for Winter Olympics
|1960||Squaw Valley (CBS)||$50K|
|1980||Lake Placid (ABC)||$15.5M|
|2002||Salt Lake City (NBC/cable)||$545M|
|2014||Sochi, Russia (NBC/Comcast)||$775M|
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