NEW YORK: Fox and ESPN plan to bid for US rights to televise the 2014 and 2016 Olympics, challenging NBC, which said it would lose money on this month’s Winter Games.
Fox’s bid will reflect the costs of producing the Olympic Games, said David Hill, chairman of Fox Sports. CBS and Time Warner also are considering a joint bid for the 2014 Winter Games in Sochi, Russia, and the 2016 Olympics in Rio de Janeiro, two people with knowledge of the situation said.
Flat advertising and higher costs for rights led NBC to project its first loss in at least three decades on an Olympics for the games that start Feb. 12 in Vancouver. The International Olympic Committee has delayed bidding for the 2014 and 2016 events until the ad market improves, said executive board member Richard Carrion. Fox’s bid will ensure that the network doesn’t lose money if it gains the rights, Hill said.
“I’ve worked at News Corp. too long and I know that having brackets around numbers is a bad career move,” David Hill, chairman of Fox Sports, said in a Jan. 8 interview.
NBC has held rights to the Olympics since 2000. The New York-based network will be “fiscally prudent” in pursuing the 2014 and 2016 games, NBC Universal Chief Executive Officer Jeffrey Zucker said in December.
Offers for the Sochi and Rio games probably won’t exceed the $2 billion NBC paid for this month’s Winter Games and the 2012 Summer Games in London, said Michael Trager, a sports consultant and former NBC Sports executive.
“It’s hard to perceive that it’s going to be any quantum leap higher than it is now,” Trager said in an interview last week. “These two games are a testament to where it’s going to be.” ESPN’s bid will involve parts of Disney and its ABC network, said Russell Wolff, managing director of ESPN International.
“We intend to look at it seriously and make an appropriate offer,” Wolff said. ESPN, based in Bristol, Conn., has never had the US TV rights to the games and holds rights in countries including Canada and Brazil, he said.
Chris McCloskey, an NBC spokesman, declined to comment. Ed Adler, a spokesman for Time Warner, also declined to comment, as did CBS spokesman Gil Schwartz. CBS last broadcast the Winter Olympics in 1998 from Nagano, Japan.
NBC will lose about $250 million airing the Winter Olympics, GE Chief Financial Officer Keith Sherin said last month on a conference call. Ad sales in Vancouver will be $650 million to $700 million, he told Media Week.
The network would like to retain the rights for the Olympics, Zucker said in an interview with CNBC in December.
Rights to the Vancouver games alone cost NBC $820 million, said a person with knowledge of the situation, who asked not to be named because the sales are private.
Revenue will be little changed from 2006, when NBC paid $613 million - about $200 million less - for rights to air the Winter Games from Torino, Italy, generating $650 million in total ad sales, said the person.
A 30-second advertising spot airing during the Vancouver games is selling for $500,000 to $600,000, the person said.
Production costs and setting up a separate division in a foreign country are among the “number of problems” associated with broadcasting the games, Fox Sports’ Hill said. Fox bid $1.3 billion for Vancouver and London rights when it lost to NBC, he said.
