With all the excitement and hype surrounding the Vancouver Olympics, I’ve been wondering about all the PR that goes into the Olympics. I found an interesting article here about NBC and their investment in the Olympics. I believe their investment was very risky. NBC took an enormous gamble in investing as much money as they did, years before the event: “In 1995, when NBC spent $2.3 billion for TV rights to the 2004, 2006 and 2008 Games, it was the biggest sports-rights deal in history. The network followed in 2003 with $2 billion for 2010 and 2012. bid $1.3 billion; ESPN/ABC proposed a revenue-sharing arrangement with the .”
The downturn of the economy has made NBC very vulnerable to loss. According to the article, NBC paid $820 million for the rights to own the broadcasting, but NBC and corporate parent General Electric could lose as much as $250 million. NBC certainly wasn’t expecting the recession when making such an investment; however, their coverage will definitely help NBC’s prime time shows like the “Today Show.” The article says NBC received an average of $400,000-$575,000 per 30-second spot for primetime Olympics telecasts. I don’t think this will be enough to cover the high rights fee but these rights definitely helped dwindle the late-night show (Leno vs. Conan) controversy. But what is next? The article points out that the Summer Olympics in 2012 (which NBC has rights to as well) is not as likely to be as profitable because of time zone differences for viewing (this was a big problem when the Olympics were in Athens and Sydney) and the anticipation of increased fees.
So what does NBC need to do to keep people watching AFTER the Olympics? Although the Olympics were “a cleansing moment” for NBC, the late-night shows created such a stir that they need to figure out something positive to bring the viewers back. I think NBC handled the situation very poorly. I’m a fan of both Leno and Conan, but I think NBC should have given Conan more than 7 months to see how the show would go. I agree with Conan that NBC giving him a “Tonight Show” spot 30 minutes later simply would not be the same. What do you think? Does NBC have a chance to bounce back after the Olympics?