NBC Top Bidder, Receives $4.3 Billion Rights for 2014-2020 Olympics

For only a cool $4.3 Billion dollars, NBC-Universal has earned itself the rights to broadcast everything Olympics in the United States at least through the 2020 games. This includes the 2014 winter event, in Sochi, Russia; the 2016 summer games in Rio de Janeiro; the 2018 Winter Olympics (with finalists as Annecy, France; Munich, Germany, and Pyeongchang, South Korea); and the 2020 Summer Olympics (with only Rome having initiated an official bid at present).

For NBC, this is a bit of a discount off of their last contract, where they paid a record $2.2 billion for just the 2008 and 2010 games. Still, the corporation, which has recently come under 51% ownership from cable mega-corp Comcast, hugely outbid both ESPN and Fox Sports: the other two competitors. Fox bid only a “paltry” $3.3 billion for the rights to all four (or, alternatively, $1.5 billion for just 2014 and 2016), and ESPN put up a $1.4 billion bid, but was only interested in committing to 2014 and 2016.

The winning NBC bids, broken down by the year, were as follows:
2014 – $775 milliion
2016 – $1.226 billion
2018 – $963 million
2020 – $1.418 billion

There has been a ton of debate since the announcement was made as to whether or not this deal makes financial sense for NBC, after they returned a direct net loss from the Beijing/Vancouver duet; however here we’ll focus on the ramifications of the decision for swimming itself. Strong, viable arguments have been made on both sides from the perspective of our sport (though most of these debates center around the pros of NBC versus those of ESPN, without much consideration for Fox’s bid). At the end of the day, it’s all hypothetical, because ESPN didn’t put up the money it took, but its still an interesting exercise to consider what this means for the growth of our sport. Whether we all like it or not, the Olympics is still swimming’s single biggest platform off of which to spring into increased exposure.

Pro-NBC

Though swimming, as a sport, isn’t necessarily concerned specifically with NBC’s profits off of the Olympics, they are still hugely relevant. Given that there was at least a 9-figure loss on the combination of the 2008 summer and 2010 winter Olympics (when only production costs, rights costs, and advertising revenue are considered), NBC has to be reliant on cross-promoting and cross-branding to try and recoup those losses. According to Forbes’ SportsMoney blog, however, that plan didn’t work out quite as well as NBC had hoped, and they have been unable to recoup their losses via cross-promotion.

What NBC/Comcast might now be relying on, however, is more cross-promotion of its two sports networks: Comcast’s Versus and NBC’s Universal Sports (both of which are likely to undergo some heavy rebranding in the coming months). Whether both remain as independent networks, or they are merged into one, its clear that NBC is making a big push for a National cable sports network. Though everything’s a bit fuzzy post-merger, thus far Universal Sports has increased swimming coverage 10-fold over what was previously available through mainstream sports media. In the next week or so, the network will air 11 hours of swimming coverage, which is more swimming than I can remember ESPN showing in the past year. That includes live, tv coverage of the Santa Clara Grand Prix next weekend. Combine that with some excellent online content (including Chloe Sutton’s blog), and Universal Sports is clearly using swimming as one of the cornerstones for its coverage.

Currently, ESPN has so many contracts with major sports networks, that they’ll never air a swim meet in prime-time, or even a weekend afternoon when anybody is home to watch it. The meets, if ESPN even chose to pick them up, would be relegated to mid-afternoon on weekdays along with competitive darts and spelling bees. During the hours when anybody is awake to give swim meets any real exposure, there’s too much competition with football, basketball, and baseball audiences to ever expect ESPN to give swimming serious year-round considerations.

Combine that push with the cynergy of being owned by a cable network and the potential explosion of viewership after Olympic cross-promotion, and there’s some exciting possibilities there. And if NBC doesn’t plan on beefing up its year-round Olympic sports coverage, there’s not many other explanations (or business-models, in the verbiage of Forbes readers) that make sense for repeating a high bid on an otherwise losing proposition.

Pro-ESPN

ESPN is the self-proclaimed Worldwide Leader in Sports, and it’s hard to argue their point. At present, they have access to 25 different networks worldwide (including their ESPN on ABC moniker), over 100 ESPN radio affiliates, and the world’s 64th-most popular website on the internet of any genre. Mid-afternoon coverage on ESPN2 could draw a higher viewership than primetime coverage on Universal Sports — at least without some serious growth by the NBC network.

The vastnesses of ESPN’s experience and employment base means that they can show every single event live on TV, and the internet, and offer 150 hours of Olympic coverage a day. Given that swimming is routinely one of the biggest (if not the biggest) draws of the Olympic Games, perhaps ESPN could be convinced to keep this coverage around longer. Sure, NBC and Universal Sports might live-cast a meet every once in a while, but live swim meets have a limited interest. What ESPN offers is the potential for highlights, sportscenter recaps every week, a monthly special, and the chance to move from the top of the small heap of Olympic sports, to the bottom of the big-heap of the higher-profile sports. The difference between the two levels could mean tens-of-millions of dollars in endorsement deals for the athletes.

Right now, that doesn’t seem feasible, but our sport is definitely growing at the professional level. It’s one of the most highly-participated in youth sports in the country, and all of those millions of young swimmers are now starting to become aware that there’s a whole level of swimming between the NCAA’s and the Olympics. Because of the long-term nature of this plan, one has to think long term — to what is possible at least in 2016. ESPN is already thinking long term, and has ramped up their written coverage of the sport in the past few months.

What it really boils down to is that ESPN brings excitement. Afterall, it’s ESPN! To have our sport viewed on the biggest sports network that has ever existed, alongside Peyton Manning and Lebron James, would be the ultimate victory for swim fans.

Conclusion

To me, this boils down to can versus will. ESPN can bring a level of exposure to the sport that nobody can match. NBC, and their two cable sports networks, seems to be more willing to do so, and to build a network with swimming as one of its major foundations. Now that Comcast owns Universal Sports, it will be ensured better exposure and a better listing for the 23 million homes subscribing to Comcast. That network is due for a popularity explosion, and I think it will take swimming with it.

Maybe we can have the best of both worlds. Maybe NBC, Universal Sports, and Versus will bring enough exposure to the sport that it will force ESPN’s hand. But I see this as the best outcome possible for the future of our sport.