NBC's Circle Game

Even without Dick Ebersol, NBC continues its decades-old quest for Olympic gold with a $4.3 billion bid to broadcast the games through 2020

By Rick Horrow and Karla Swatek

From the beginning of time, it seems, Switzerland has worked hard to maintain its neutral status. Wars have torn apart the European continent for millennia, yet Switzerland has remained remarkably unscathed. In the sports realm, the country has also avoided any negative inference—it's known primarily for producing Roger Federer, the best tennis player to grace a court in our lifetimes, as well as some pretty darn good Alpine skiers.

In the past two weeks, however, Switzerland has been ground zero for two votes that will affect the global sports industry for at least another decade. Last week in Zurich, Swiss native Joseph "Sepp" Blatter, a top FIFA steward for the past 36 years, was reelected as FIFA president despite a tsunami of scandals. This week in Lausanne, NBC cemented its role as the primary curator of the Olympic Games in the U.S. when its $4.38 billion bid earned it the rights to broadcast the Games through 2020. With broadcast rights secured for an as-of-yet homeless contest in 2020, the U.S. Olympic Committee, which had decided to sit out the 2020 bidding process, is now under pressure to bid for the 2020 Games.

It might be the only time in which 2020 doesn't equal perfect vision.

Olympic TV Rights

While longtime NBC Sports head Dick Ebersol's abrupt resignation from NBC at first upended all assumptions about the future of the Olympics on TV, it was business as usual for the Peacock Network this week, as NBC won the rights to televise the Olympic Games in the U.S. 2014-20, for the tidy sum of $4.3 billion—an amount equal to the entire 2008 GDP of Fiji.

NBC's bid for four Games was almost $1 billion higher than the bid put forth by Fox, the runner up, yet Comcast (CMCSA) Chairman and Chief Executive Brian Roberts assured company shareholders that NBC's plan would be profitable. "It was strategically important for us to have a long-term relationship," Roberts told media assembled at the bid site. "To have four more Games, not just two more Olympics, was of great value to us and a big part of our strategy. … We're very, very comfortable where this ended up."

Roberts added that he envisioned NBC's Olympic investment could turn a profit by combining NBC's main broadcast platform and cable networks with Comcast's sports properties, comprising Versus, Golf Channel, and 11 regional sports networks. Analysts have noted that the Olympics deal could help make Versus a more powerful player in the sports universe, coupled with the cable concern's retention of NHL rights and adoption of such other NBC programming as Notre Dame football. (Regis Philbin as spokesman, anyone?)

The Olympic Games are estimated to cost NBC $775 million in 2014 (Winter Games in Sochi), $1.226 billion in 2016 (Rio de Janeiro), $963 million in 2018 (Winter, TBA July 6 of this year) and $1.448 billion in 2020 (Summer, also unsecured for now). This is the first time an American rights holder has committed to a multibillion-dollar rights fee without the USOC bidding to host the Games—in 2003, the last time the IOC auctioned off the rights, New York was in the running to host the 2012 Games, eventually won by London.

The potential repercussions of Ebersol's resignation were made apparent last week, when sources told SportsBusiness Journal that CBS (CBS) and Turner Sports started kicking around the idea of making a joint bid. CBS and Turner's decision to revisit Olympic rights marked a reversal from weeks earlier, when executives thought the price tag was too high.