Saturday, August 23, 2008

The 2008 Beijing Summer Olympics – credit deserved – NBC’s amazing Olympics

If history teaches us anything it is that we learn from our mistakes. NBC’s 2008 Beijing Olympic experience is an example of how a major corporation (the National Broadcasting Company – NBC) owned by General Electric, took what they learnt from their previous Olympic Games coverage and will have delivered a stunning 17 days of coverage by the time the Games end Sunday.

The numbers (looked at in an earlier Insider Report) have seen NBC deliver their best ever Olympic Games ratings, best ever Olympic Games advertising sales and best ever Games coverage. That is a testament to learning what worked and didn’t work in the 11 previous Olympic Games NBC has televised.

NBC made their Olympic television debut when they showed the 1964 Summer Olympics from Tokyo, marking its Olympic TV debut. They did this with the aid of the Syncom 3 satellite for direct broadcasts.

Meanwhile, NBC first televised the Winter Olympic Games in 1972, while the 1964 Summer Olympics were the first Summer Olympics televised by NBC.

NBC had won the U.S. broadcast rights for the 1980 Summer Olympics, but when the United States Olympic Committee kept U.S. athletes home to honor the boycott announced by President Jimmy Carter, the telecasts were greatly scaled back. In the end, what had been 150 hours of scheduled coverage, shrunk to just a few hours of weekend highlights. These highlights were fed to local NBC stations for use on local newscasts. Many affiliates however, refused to show the Olympic highlights on their local news. They also refused to clear airtime for the few hours of coverage NBC did present.

NBC then bid for, and won, the rights to show the 1988 Summer Olympics. Network officials convinced the organizers in Seoul to stage most of its gold-medal finals in the afternoon, which is primetime of the previous night in the U.S. Bryant Gumbel was the host that year.

Just as his mentor Roone Arledge had before over at ABC, Dick Ebersol, who took over NBC Sports in 1989, decided to make the Olympics a staple of his network's sports television schedule. NBC continued its Summer Games coverage into the decade, with both the 1992 Summer Olympics in Barcelona and the 1996 Summer Games in Atlanta. And as with Arledge (who had to deal with the Munich massacre during the 1972 Summer Games), Ebersol had to deal with breaking news during the Games. During the Centennial Olympic Park bombing in 1996, NBC suspended its coverage of a volleyball game and broadcast the news for several hours commercial-free. Bob Costas made its debut as primetime host in 1992. Costas had previously, hosted the late night coverage in Seoul.

To help defray the increasing costs of broadcast rights, NBC turned to cable and satellite services for additional coverage. In 1992, NBC teamed up with Cablevision for the Triplecast, which provided three channels of pay-per-view telecasts that supplemented NBC's regular coverage. However, NBC lost over $100 million, the package was dropped, and there was no supplemental coverage from Atlanta.

Coverage in the first decade of the 21st century revolved around two major storylines:

NBC became the sole U.S. rights holder for the Olympic Games for the entire decade and beyond. The network could rightly boast of being "America's Olympic Network" as it made the longest and most expensive commitment ever since the Olympics were first presented on TV. For the 1996 Summer Games, and all Games from 2000 to 2008, NBC paid a total of $3.5 billion, mostly to the International Olympic Committee but also to the USOC and local organizers. To extend rights to the 2010 Winter Olympics and 2012 Summer Olympics, NBC then gave up another $2.2 billion.
The rise of various media platforms extended the reach and availability of Games coverage. NBC returned to supplemental cable/satellite coverage in 2000, with some events on CNBC and MSNBC.

In 2004, it added USA Network, Bravo, and Telemundo, all of which parent company NBC Universal had acquired earlier in the decade.

In 2006, Universal HD was added to the list of channels carrying the Games. Finally, in 2008, events were streamed live for the first time on the Internet through the website (Also in 2008, Oxygen replaced Bravo as a supplemental network, and NBC launched high-definition channels dedicated to the basketball and soccer competitions.)

USA Today sports media reporter Michael Hiestand (one of the most influential in the industry) believes NBC finally understood how they could best deliver an Olympic Games.

“Not to be ungrateful, but anybody watching Beijing Olympic TV could reasonably ask: NBC, what took you so long?
“What's good about NBC's coverage, which is so far highly rated and acclaimed, is that it's another step in the long slog toward bringing common sense to Olympic TV — and gradually squeezing out elements of the Olympic TV formula that long annoyed viewers.

“Take the up-close-and-personal features NBC uses to introduce viewers to largely unknown athletes. Now, they're usually concise and neatly tucked in event coverage.

“But they used to seem like mini-movies that could leave viewers just tuning in wondering if they really had the channel showing the Olympics. It took NBC's stream of tear-jerkers for the 1996 Atlanta Games — how did John Tesh manage to find so many athletes whose pets were gravely ill? — To turn the tide against these maudlin melodramas. NBC Sports chief Dick Ebersol joked (sort of) that they'd no longer portray asthma as a life-threatening condition.

Now, NBC gives us glimpses of Beijing, rather than forced sightseeing. Travelogues became of Olympic TV when ABC's Roone Arledge invented the Olympic TV formula in the 1960s, when spanning the globe seemed exotic. But by the time CNN gave us Baghdad being bombed live in 1991, the novelty was gone. Still, it was only after NBC's wandering travelogues (albeit from fascinating Australia) for the 2000 Sydney Games that NBC cut back on forcing viewers back on the tour bus.” Hiestand offered in a USA Today report.

Hiestand continued his look at what NBC has done right and how they finally arrived were they are today: “Kids today might assume there was always lots of live Olympic action on various channels — even if the best action is still held for all-important prime time — because the idea seems obvious. But it was a long march to get it, though every moment of live Olympic action has been available to national Olympic TV rights-holder for decades.

“Many people probably didn't know that all-encompassing world TV coverage was being kept from them until NBC tried to sell it to them with its "Olympic Triplecast" of the 1992 Barcelona Games, a $125 TV package that almost nobody bought. And even after CBS offered free supplemental cable TV Olympic action for the 1994 Lillehammer Games, NBC offered none for its wildly popular 1996 Atlanta Games. That rendered many top athletes, such as soccer's Mia Hamm, invisible.

“The trickle of supplemental cable TV coverage NBC began with the 2000 Games led to this year's debut of NBC putting the world TV feed being available online — something that's already happened in many other countries. Prime-time viewers used to be left in the dark about exactly what they were about to see and when, so they wouldn't channel-surf. Starting with the 2002 Salt Lake Games, NBC has been dropping more hints.

“After an irreverent cable TV skating show with Dick Button and Mary Carillo was a hit at the 2006 Torino Games, NBC's Beijing coverage has avoided being too earnest — even showing host Bob Costas outdoors.

“So now, NBC says there's no way that it will deviate from its routine of showing prime-time Olympic action on tape-delay in the Pacific and Mountain time zones — the regular formula it uses for entertainment shows — even if Michael Phelps is swimming for his eighth gold medal in Saturday's 4x100 medley relay. That's just not how they do things. When it comes to Olympic TV finally making sense, you need to be patient.”

When the Games end Sunday morning (Americans will see the Closing Ceremonies Sunday night hours after they’ve ended and many of the athletes will be on their way back to the United States) NBC will have had their Beijing expectations not only met but exceeded.

Neal told the USA Today’s Michael Hiestand NBC has been pretty happy with its Chinese hosts and story lines such as Michael Phelps. "I came to these Games with stratospheric expectations, and they've been exceeded," Neal says. "The planets were aligned."

Agreed the a great deal fell into place for NBC but the key was the table being set during the first week. The two marquee events from week one (swimming and gymnastics) where both held during the morning in Beijing – with the 12 hour time difference live in prime time on the American east coast. Sports makes for compelling television when it televised live. The last two Summer Olympics (Sydney 2000 and Athens 2004) where offered on a tape-delay basis for the most part by NBC – that didn’t work in delivering record ratings numbers.

News earlier this week that ESPN/ABC and the Fox network are interested in bidding for the rights to the 2014 Winter Games (scheduled to be held in Sofia, Russia) and the yet to be awarded 2016 Summer Games could push the rights for the next available Olympic quadrennial to the stratosphere. The interest ESPN/ABC and Fox have in the Olympic Games doesn’t come as a surprise to industry insiders.

On June 7, 2003 The New York Times Richard Sandomir reported that: NBC Sports held on to its Olympic franchise by winning a three-way auction for the United States media rights to the 2010 and 2012 Olympic Games with a record bid of $2 billion. It was augmented by a nearly $200 million deal for General Electric, NBC's parent, to become a worldwide Olympic sponsor. The bid was made even though the sites for those Games have not yet been determined.

NBC outbid offers made by the News Corporation's Fox network and by ABC and ESPN, which are owned by the Walt Disney Company.

The price for TV rights exceeded by 33 percent the $1.5 billion that NBC paid for the 2006 and 2008 Olympics. Including the G.E. Olympic sponsorship deal, the bid at its maximum means that the Olympic committee will receive 47 percent more for the Games in 2010 and 2012 than in 2006 and 2008.

It remains to be seen which city will host the 2016 Summer Games. The right to host the 2016 Summer Games will be decided on October 9, 2009 (a little over a year from now), at the IOC Congress in Copenhagen Denmark.

Chicago, Madrid, Rio de Janeiro and Tokyo have been selected to the shortlist and will compete to host the 2016 Olympic Games. Baku, Doha and Prague were eliminated June 5, 2008. It remains to be seen where the 2016 Games will be held but logic (and money) dictates the 2016 Games will be held in Chicago. If an American city hosts the Summer Games for the first time since Atlanta Games in 1996. The IOC could generate as much as $3 billion for the 2014 Winter Games and 2016 Summer Games.

According to published reports when NBC reached their rights agreement for the next quadrennial NBC paid $820 million for the 2010 Winter Games and $1.18 billion for the 2012 Summer Olympics. G.E. sweetened its investment by becoming a worldwide Olympic sponsor (the TOP program), which will cost $160 million to $200 million.

Using those figures as a barometer if rights where awarded after the 2016 Games are awarded (unlikely but very possible) and the Games are awarded to Chicago the IOC could realize $1 billion for American rights to the 2014 Games and……$2 billion for the rights to the 2016 Chicago Games.

SBN’s belief that the 2016 Games are destined for Chicago – all one needs to do is follow the cookie crumbs the IOC has left. The 2012 Games are being held in London. Back-to-back Summer Games in Europe all but eliminates Madrid. The 2000 Games where held in Sydney, the 2008 Games in Beijing again it just doesn’t make sense to award another Summer Games to that geographical region. As for Rio de Janeiro – the Summer Games have never been held in South America, but the 2014 World Cup will be held in Brazil. The IOC won’t award the Summer Games to the country that is playing host to the 2014 World Cup. That would be bad business.

The Olympics are a hot TV property again thanks to NBC. Under the leadership of Dick Ebersol the Olympics have become a stand and deliver property for NBC. Ebersol was named chairman of NBC Universal Sports & Olympics in May 2005, after serving as chairman of NBC Sports & Olympics since June 1998. He is responsible for all sports programming on the NBC and USA networks, along with overseeing every aspect of NBC Universal’s involvement with the Olympic Games.

ESPN/ABC and Fox may be interested but all they’re going to do is push the price for the 2014 Games and 2016 Games up. At the end of the day as far as Dick Ebersol is concerned NBC has to have the Olympic Games. Thanks to the results NBC produced in Beijing Dick Ebersol will be ready and waiting for the IOC with a blank check when they come calling looking to sell the rights to the 2014 and 2016 Games.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: The New York Times and the USA Today.

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