More Money In

More from the IOC Executive Board meeting: the IOC expects to bring in more and more money for the rights to broadcast the Olympics:

The IOC's Asian negotiations come after the conclusion of negotiations with U.S. and European broadcasters, who Carrion says paid rates more than 30 percent higher for the 2010 and 2012 games than they did in previous contracts. … The amounts the IOC pulls in keep climbing. Even without the Asian markets, TV rights sales so far for the 2010 and 2012 Games have exceeded $2.9 billion, eclipsing the $2.5 billion for the Turin Games and Beijing Games.

On the surface, the most surprising revelation here is that NBC agreed to pay $2 Billion for the US broadcast rights, a 35 percent increase over what they paid for 2006/2008. It was widely reported that NBC did very poorly on their ratings for the 2006 coverage. So what would make them up their bid this much?

First, of course, NBC will be hoping to make most of its money back on the summer Olympics, not the winter Olympics, so the bad ratings for the winter Olympics aren't necessarily critical. Second, the negotiated rights aren't just for television; they include internet multimedia, too, and NBC saw record traffic on their web site in February.

A little research, though, reveals the real reason for the disconnect: NBC made their bid for 2010/2012 long before the 2006 Games — in fact, even before they knew the identity of the 2010 or 2012 host cities!

So the offer from NBC reflected their best guess at potential advertising revenue more than two years ago. If the 2006 ratings indicate a real decrease in viewer interest, it will be a couple of years before we see the impact on the bid price.

As for the rising IOC revenues, the increase from US rights accounts for half a billion dollars of the bump. Even discounting that, it looks like the price for worldwide broadcast rights will show a significant increase over the four-year cycle.