A time-honored Olympic tradition is NBC losing money to broadcast the event to the world. The company has been working hard to change the dynamic, and it seems likely that NBC actually turned a profit at the 2014 Sochi games.
Comcast (CMCSA), which now owns NBCUniversal, has said for several years that it expected the Sochi games to be profitable. While it hasn’t definitely declared success, the company did say on Tuesday that it took in $1.1 billion in revenue from the games. It spent about $775 million to acquire the rights to the games, and its total investment was $875 million, according to Bloomberg News.
Calculating profit isn’t as straightforward as subtracting NBC’s investment from the revenue it made at the Olympics; some companies that bought Olympic ads would have spent that money on ads placed in NBC shows. But the numbers compare favorably to past Olympics. General Electric (GE), which owned NBC in 2010, said it made $800 million in revenue from the Vancouver games but lost $223 million overall. Comcast said the 2012 games earned slightly more–$1.2 billion in revenue–but it also spent significantly more for the broadcast rights because basketball is more popular than curling.
NBC bet big on the Olympics in 2011, when it spent $4.4 billion for the rights to the games through 2020. At the time, the decision encountered skepticism in some corners. But the Olympics’ impact has always been tricky to measure because benefits are largely indirect.
Comcast probably views any profit it makes from the Olympics as gravy, according to Neal Pilson, a former head of CBS Sports (CBS) who served as a consultant on television rights to the International Olympic Committee. “There are good corporate reasons to stay with a major sports property, even if it’s a borderline profit generator,” he told Bloomberg TV in 2011. Retaining the Olympics, he said, “is a very important part of their corporate psyche.” Who can put a price on that?