By Philip Hersh, Tribune reporter
5:07 PM EDT, May 7, 2014
For $7.75 billion, NBC has extended its U.S. broadcast rights for the Olympics through 2032 without going through a bidding process.
The new deal, announced Wednesday by NBC and the International Olympic Committee, covers the period 2021-32, including three more Winter and three more Summer Games.
The IOC, which owns the rights, clearly chose long-term security and familiarity over the potential to capitalize on the explosive growth of sports television rights through open bidding or a shorter deal.
NBC will pay an average of $1.1 billion per Olympics for the four Games from 2014 through 2020. The network will pay about $1.25 billion per Games for the following six, which represents about a 14 percent increase.
By comparison, Major League Baseball more doubled its annual rights fees - to $1.5 billion - in its most recent deals with ESPN, Turner and Fox, signed in October, 2012. NASCAR got a 46 percent increase to $820 million a year in its new deal, with NBC and Fox, announced last summer.
When the new Olympic deal ends, NBC wlll have broadcast 23 Summer and Winter Games.
"This kind of deal is not only about money," IOC President Thomas Bach said in a Wednesday conference call with reporters.
NBC's payment includes $100 million to be used for promotion of "Olympism and the Olympic values" between 2015 and 2020.
The deal emphasizes again that the United States remains overwhelmingly the major pillar of financial support for the IOC, especially in terms of broadcast rights. Whether that will finally redound to the benefit of a future U.S. bid to host the Oympics remains to be seen.
The U.S. Olympic Committee is to decide by the end of this year whether to submit a bid for the 2024 Summer Games. Its last two bids, by New York for 2012 and Chicago for 2016, both suffered humiliating defeats at the hands of IOC members, partly over discontent about the USOC share of U.S. broadcast rights, which since has been slightly reduced.
The USOC share still will be approximately $1 billion over the term of the 2021-32 deal.
Asked by the Tribune during a Wednesday conference call whether this new U.S. broadcast deal means a 2024 U.S. bidder should be rewarded, IOC President Thomas Bach reiterated his previous statement that a strong U.S. bid would be welcomed and a "very strong competitor."
USOC chairman Larry Probst, also on the conference call, thanked the Tribune for asking the question.
"I completely agree with your sentiment," he said, getting laughs from the NBC and IOC officials listening.
NBC Sports Group chairman Mark Lazarus pointed out that the deal was made without knowing the site of any of the six Olympics involved.
"A Games in the States, in North America, certainly would be good for our business.. . but our success with the Games never has been contingent on the location of those Games," Lazarus said.
This is the third time since 1995 that NBC has acquired extended Olympic rights without a bidding process. The network got rights for 2000 and 2002 with a pre-emptive bid in August, 1995. Five months later, it struck a another such deal for 2004, 2006 and 2008.
Negotiations between NBC and the IOC on this extension have been going on sub rosa since last November.
"You always need to have a fair balance between knowing your property is in good and reliable hands and the financial commitment," Bach said. "For us, the confidence and the reliable promotion of the Olympic Games is key. This is why we wanted to build on this longterm partnership with NBC.
"From the fact we are signing this agreement, you can see we have found this balance. This is why we did not see any reason to take any risk with the broadcasting and presentation of the Olympic Games in the United States."
NBC has had the rights for every Summer Olympics since 1988. Prior to that, it was U.S. broadcaster of the Summer Games in 1964 and 1980 and the Winter Games in 1972.
In 2011, NBC paid $4.38 billion for rights for the 2014, 2016, 2018 and 2020 Olympics. It had bought the 2000 through 2012 rights for $5.7 billion, meaning by 2032 the company will have forked over $17.68 billion to the IOC in this century alone.
Now it owns the property until the cash cows come home.
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