Confirmed: NBCUniversal Wins Bidding for Olympic Games

Company to pay $4.38 billion for rights to next four Games, beginning with 2014 Winter Games in Sochi, Russia

By Jon Lafayette -- Broadcasting & Cable, 6/7/2011 12:46:16 PM

UPDATED: 4:55 p.m.

NBC and its new owner Comcast won the U.S. rights to televise the next four Olympic Games with a bid worth $4.38 billion, continuing its lock on one of TV's most watched events.

In those future games, NBC plans to show all events live, either on broadcast, cable, streaming or on some other platform, a change of its strategy of hoarding some events to build a large primetime audience.

Comcast, which has been talking about financial discipline after NBC lost $233 million on the Winter Games from Vancouver, topped bids from Disney's ESPN and News Corp.'s Fox Sports. Comcast CEO Brian Roberts said that by securing rights for four Olympics, the company was assured that it could turn a profit and build value for shareholders.

The winning bid includes $775 million for the 2014 Winter Games in Socci, Russia, $1.226 billion for the 2016 Summer Games from Rio de Janeiro. NBC also paid $963 million for the 2018 games and $1.418 billion for the 2020 games, though sites for those events haven't been set.

"We are excited to get started and continue the great legacy and work that has been the relationship between NBC and the Olympics. We couldn't be more proud," Roberts said during a press conference announcing the decision by the International Olympics Committee.

"We've been clear from the beginning that we want to be disciplined and responsible," Roberts said. "We think this will be a profitable relationship for NBC Universal. Having eight more years, we will have an opportunity to build up a lot of the assets at NBC Universal."

Because both the new Olympics deal and a recent agreement with the National Hockey League were essentially renewals, "I don't think this will change the financial profile of the company." But he conceded that "on a human basis, I wanted to win for the team. . . we poured our heart and soul into it."

Mark Lazarus, chairman of the NBC Sports Group, said the deal includes rights to put Olympic events on "every platform known today" as well any to be conceived over the life of the agreement. "It's all encompassing. That's part of the value of our new company."

Lazarus said that that for the four games starting in 2014, every event will be shown live on one platform or another. "We think that with today's technological advances" NBC can create a quality experience "that is good for the super sports fan but doesn't change our strategy for building that shared experience," he said. "We have a smart plan that will allow the super fan to watch life and not detract from the prime time audience" on broadcast.

He added that streaming plans for the London games would be reexamined.

IOC President Jacques Rogge aid NBC had "great experience in broadcasting the Olympics . . . the Olympics is in their DNA." He added that the deal gives the Olympic movement "financial viability for the next 10 years."

"Comcast and NBC showed the depth of their commitment and their passion" in their presentation," added IOC Executive Board member Richard Carrion, who led the negotiations. "This was a competition for which there is only a gold medal, and they won the gold medal."

Carrion said some of the bids were for two years, others were for four. The other bids "were very much in the ballpark," he said. But NBC's bid for four full games "that was what put us over the line." He added that the committed was "blown away" by the passion NBC showed for the Olympic Games. He cited an emotional appeal by announcer Bob Costas, and added that the presence of Roberts and NBCU CEO Steve Burke "impressed us with the depth of their commitment."

Carrion added that while there are no plans to create an Olympic channel, it is possible under the new agreement, provided that NBC, the IOC and the U.S. Olympic Committee all come to an agreement.

Sources said that Fox made two bids. One was $1.5 billion for the games in 2014 and 2016.  The other was $3.4 billion for the package of four games through 2020. ESPN's bid was $1.4 billion for the 2014 and 2016 games.

"We congratulate NBC/Comcast and would like to thank President Rogge, Richard Carrion and the IOC Executive Committee for giving us the opportunity to participate in the process, demonstrating how Fox Sports would produce the Olympic Games, provide wide distribution, the largest marketing platform ever and an economic package we believed to be good for the IOC and News Corp," said David Hill, chairman of the Fox Media Group.

"We made a disciplined bid that would have brought tremendous value to the Olympics and would have been profitable for our company," ESPN said in a statement. "To go any further would not have made good business sense for us. We wish to congratulate the IOC on a fair and transparent process, and we offer our best wishes to Comcast/NBC. We put our best foot forward with a compelling offer that included the enthusiastic participation of all of The Walt Disney Company's considerable assets."

Executives from NBCUniversal, Walt Disney's ESPN and News Corp.'s Fox Sports, traveled to Lausanne, Switzerland to pitch the International Olympic Committee. NBC, which has carried the Summer Olympic since 1988 and the winter games since 2002, is now controlled by Comcast, which acquired a majority stake in the broadcaster in January.

Dick Ebersol, who as chairman of NBC Sports had strong relationship with the IOC and guided the award- winning production of the event, resigned from NBC last month after disagreements with top Comcast executive. He was replaced by former Turner Broadcasting executive Mark Lazarus, who headed NBCU's presentation. It was unclear how Ebersol's absence affected NBC bid, from both a financial and a programming viewpoint.

Eight years ago, NBC bid $2.2 billion for the 2010 Vancouver Games and the 2012 Summer Games to be held in London. NBC outbid Fox, which offered $1.3 billion. NBC wound up losing $233 million in the Vancouver Olympics.

In 1995, NBC bid $3.5 billion for five Olympics, getting the games from 2000 to 2008. The offer was large enough that the IOC accepted it without having anyone else bid.