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Guest Message by DevFuse


NBC gets 4 Olympics for a mere $4.38 billion

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#1 OFFLINE   phrelin


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Posted 08 June 2011 - 05:00 PM

It must be nice to be so successful.

The Comcast/GE owned NBCU run by Comcast just had its ratings-challenged broadcast network subsidiary NBC agree to pay $4.38 billion for an unprecedented four-games package (2014, 2016, 2018 and 2020).

Sounds like a prudent move based on experience. The LA Times notes: "After all, it lost $233 million on the 2010 Games and is likely to take a bath on the 2012 Games."

The Times article offers a possible explanation:

The price tag has NBC's rivals wondering if the company didn't once again over extend itself on the Olympics. But Comcast Chief Executive Brian Roberts was adamant that the Games would be profitable for the company.

The odds that the Olympics will generate almost $4.4 billion in ad revenue seems unlikely. Comcast and NBC will look elsewhere to drive revenues from the Olympics. The subscription fees that the company currently charges distributors to carry its sports channel Versus will no doubt go way up. Currently, according to industry consulting firm SNL Kagan, Versus gets 36 cents per subscriber, per month, from cable and satellite operators. That pales in comparison with ESPN, which gets north of $4 and ESPN2, which receives almost 60 cents.

In other words, expect to see Versus tied to NBC owned affiliate retransmission fee negotiations.:mad:

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