May 8, 2014 (ISN) – The International Olympic Committee (IOC) today announced one of the most important commercial agreements in its history, selling United States broadcasting rights to the Olympic Games between 2021 and 2032 to NBCUniversal (NBCU) for $7.65 billion (£4.51 billion/€5.49 billion).
The eye-popping deal – which the IOC claimed ensured the long-term financial security of the Olympic Movement – represents a huge feather in the cap of Thomas Bach, the IOC President, who is still four months’ short of his first anniversary in the post.
But the IOC’s willingness to sign up for almost two decades in advance in such a critical market may also reflect the pressures being brought to bear on mega-event owners in recent years while many leading world economies have been struggling to generate growth.
The deal will take to 23 the number of editions of the Games to be broadcast by NBCU since its first Olympics in Tokyo in 1964.
Steve Burke, NBCU’s chief executive, said it was “one of the most important days” in the network’s history.
The Olympics, Burke added, were “part of the fabric of our company.
“We couldn’t be more excited that today’s announcement guarantees that this massively popular and profitable programming will continue to air every two years on the broadcast, cable, digital and mobile platforms of NBCU for the next two decades.”
The overall $7.65 billion (£4.51 billion/€5.49 billion) fee – to which is being added a $100 million (£59 million/€72 million) “signing bonus” to be used for the promotion of Olympic values between 2015 and 2020 – works out at $2.55 billion (£1.50 billion/€1.83 billion) per four-year Olympic cycle, around 16 per cent up on the $2.19 billion (£1.29 billion/€1.57 billion) a cycle average for the last deal unveiled in June 2011.
This advance is partly explained by the fact that the 12 years covered by the new deal will almost certainly include the first Summer Olympics to be staged in the US in the current millennium.
Many observers believe that if a US city is not selected to host the next available Summer Games in 2024, then a US victory in 2028 would be almost a foregone conclusion.
Bach, who led negotiations with NBCU, described the agreement as “excellent news for the entire Olympic Movement”.
The IOC, he said, had worked “in close partnership with NBC for many decades” and was “thrilled we will continue to work with them through to 2032.
“NBC’s expertise in sports broadcasting, as well as their passion for the Olympic values, will mean we shall be able to continue to offer first-class broadcast coverage of the Olympic Games to the widest possible American audience for many years to come.”
NBCU has acquired the broadcast rights across all media platforms, including free-to-air television, subscription television, internet and mobile.
Brian Roberts, chairman and chief executive of Comcast Corporation, which is the US’s largest cable company, said: “The Olympics are the world’s greatest cultural and athletic event, and presenting them to the American audience is an honour and a privilege for our entire company.
“Our long-term commitment to and investment in the Olympic Movement are a reflection of our belief in the future of broadcast television, as well as our confidence that our partners at the IOC will continue to deliver great Games and that the Olympics will remain the world’s premier sports event.
“All of us at Comcast NBCUniversal are extremely proud that we have been entrusted to be the US home for nine more Olympics, and we look forward to using all of our resources to continue our tradition of ground-breaking Olympic coverage.”
Comcast last month partly attributed a 30 per cent rise in first-quarter net income to the advertising revenue generated by NBC’s coverage of the Sochi 2014 Winter Games in Russia.