IOC Cashes in on TV Popularity
Dec. 12, 1995
LONDON (AP) _ Once, the IOC said it could live without television. On Tuesday, it gladly took $2.3 billion from NBC for three Olympics yet to be given homes.
NBC acquired the exclusive U.S. broadcast rights to the 2004 (summer), 2006 (winter) and 2008 (summer) Olympics for that record sum. It's the first time a network secured the rights to three Olympics at once, and the first time the rights have been sold to a games before the site has been decided.
Not exactly what Avery Brundage, then president of the International Olympic Committee, expected in 1956 at the Winter Olympics in Cortina, Italy. Brundage claimed, ``We in the IOC have done well without TV for 60 years and will do so certainly for the next 60.''
Brundage's skepticism seemed appropriate when the last torch-bearer at Cortina's opening ceremony tripped and fell over a television cable.
Thirty-nine years later, Brundage would be shocked at how times have changed. Today, the Olympics are a multibillion-dollar industry and TV's hottest property.
The latest deal ensures financial security into the next century for an Olympic movement that was on the verge of bankruptcy and collapse just 15 years ago.
``We see this agreement as a landmark in the confidence and trust it shows in the Olympic movement,'' IOC marketing director Michael Payne said. ``The Olympics has proven itself as the premier global event in attracting TV audiences.
``The Olympics are a property on their own and wherever they take place they command higher TV ratings,'' Payne said. ``As long as the country is able to come forward with the appropriate infrastructure to stage the games, then for TV companies and sponsors it really makes no difference where the games are held.''
It's been a long journey since the first Olympics telecast at the 1936 games in Berlin, when three cameras provided 138 hours of coverage for an audience of 162,000 people.
The tradition of TV rights fees began in 1948, when the BBC coughed up about $3,000 to show the London Olympics. Reports at the time said the BBC later pleaded poverty and the organizing committee never cashed the check.
The Olympics didn't go truly global on TV until 1964 with the first satellite relay of the Tokyo games. TV rights fees reached $32 million for the 1976 Montreal Olympics, but that didn't cover the cost of broadcasting the games.
The last two decades have seen a huge increase in television rights fees and audiences for the Olympics.
Next summer's Atlanta Olympics have generated more than $900 million in global TV rights fees, including $456 million from NBC.
CBS has the U.S. rights to the 1998 winter games in Nagano, Japan, for $375 million. And earlier this year, NBC signed a $1.27 billion deal for U.S. rights to the 2000 summer games at Sydney, Australia and the 2002 winter games at Salt Lake City.
TV rights fees provide nearly half the commercial revenues for the Olympic movement. Total marketing revenues for the 1993-1996 quadrennium are forecast at around $3 billion.
The three-Olympics deal announced Tuesday marks a new chapter in Olympic television history.
``It is a tremendous vote of confidence to the Olympic movement that a major network would make such a commitment so far out,'' Payne said from Lausanne, Switzerland. ``It clearly provides considerable financial security to the movement and to future cities bidding for the games knowing they already have the financing locked up.''
Under the current system, local organizers get 60 percent of TV revenues and 40 percent goes to the IOC, national Olympic committees and international federations.
Under a new formula starting in 2004, host organizers will receive 49 percent, while the other parties share 51 percent.
Ten cities are bidding for the 2004 Summer Olympics, which will be awarded in 1997. Cape Town, South Africa, and Rome are considered early front-runners.
Payne said the new deal with NBC ``provides a lot of confidence to bidding cities that the marketing revenue is there to stage the games. It provides a lot of security and comfort.''
Payne said NBC, which has the rights to six of the next seven Olympics and five in a row from 2000-2008, will not influence the selection of future host cities.
``We have been very, very clear with all our partners that we will not accept interference in the selection process,'' he said. ``If we felt anyone was trying to interfere, it would be the end of our partnership. Presumably, NBC has confidence in the IOC selection process.''