NEW YORK/CHICAGO (Reuters) - NBC Universal drew a record number of viewers for its coverage of the Beijing Olympics, setting a standard that could have other media companies rethinking their roles in future Games.
Just a day after Sunday’s closing ceremony, buzz was already circulating around what companies could be interested in winning the U.S. broadcast rights for the next available Olympics -- the 2014 Winter Games and the 2016 Summer Games.
NBC, majority owned by General Electric Co, already has the rights to the 2010 Vancouver Winter Games and the 2012 London Summer Games, which it secured for about $2 billion.
Bids for future Games should surpass that mark if the International Olympic Committee again couples the 2014 and 2016 Games into one package, experts say. A date has yet to be set for selling those rights.
“The success of Beijing and the anticipated success of Vancouver and London, both of which are very attractive host locations, set the bar for the next round of TV negotiations,” said Neal Pilson, former president of CBS Sports and now head of a sports consulting firm in Chappaqua, New York.
“I would anticipate ... that there will be serious bidding for the rights to future Olympics,” he added.
Last week, ESPN, a unit of Walt Disney Co, said it may bid for the 2014 Games in Sochi, Russia, as well as the 2016 Games, to be hosted by Chicago, Rio de Janeiro, Tokyo or Madrid. Disney’s ABC, which would presumably air the Games in conjunction with ESPN, is second only to NBC in the number of Olympic it has broadcast in the United States.
Other likely bidders would include News Corp, which owns Fox and has bid previously, and CBS Corp. Even Internet powerhouses like Google Inc, Microsoft Corp or Yahoo Inc could make a play for a share of the Olympics, given the success NBC Universal had with putting 2,200 hours of live coverage on the Web.
“It’s very difficult to anticipate what the media landscape is going to be in 2014 or 2016. You really need a crystal ball to figure out what the value is,” said Brad Adgate, director of research for Horizon Media.
“The more people who are interested in broadcasting the Olympics -- all that does is raise the ante for broadcast rights fees, which will then be passed along to advertisers.”
He added, “You really have to be almost a Nostradamus. How well will broadband be adopted by then? Will content be streamed on cell phones? How do you sell it? How do you project revenue?”
Over the two-week Beijing Games, viewership totaled more than 200 million people, and advertising sales surpassed the $894 million NBC Universal paid for broadcast rights.
It was the most-watched event in U.S. television history, NBC Universal said, with 86 percent of households tuning in at some point.
Even with the economy in trouble and advertisers looking to cut expenses, the broadcast came out on top. After the start of the Olympics, marketers were so enthused that NBC Universal was able to sell a final $25 million in commercial time that it had held back. It sold more than $1 billion overall.
“This was a pretty banner year,” said Michael Shields, a senior editor at Mediaweek. “Some of this is unpredictable. You don’t know next time if you’re going to get a Michael Phelps, you’re going to get a China thing. But after something like this, the value could shoot through the roof.”
Scheduling helped NBC Universal’s efforts, since swimming and gymnastics, two of the most popular events with U.S. viewers, were broadcast live in prime-time on the East Coast.
The Winter Olympics in Vancouver should also make for easy scheduling in the United States, but the London Olympics in 2012 could be trickier.
Rarely can hosts grab the attention of an American audience and advertisers as Beijing did this summer. Not only did the location draw interest from Americans curious about China’s development, but organizers put on extravagant opening and closing ceremonies that will be difficult to top.
One spot that would presumably have blockbuster appeal for U.S. advertisers and audiences is Chicago, if it were to be awarded the 2016 Games.
“Just imagine if it’s Chicago,” Mediaweek’s Shields said. “That would be a huge event.”
Editing by Braden Reddall