FOX to bid on four Olympics through ’20
FOX made its pitch Monday for the next set of U.S. Olympic television rights, saying it wants to bid on a four-games package through 2020 in the high-stakes battle worth billions of dollars with incumbent NBC and ESPN.
FOX sports chairman David Hill led a six-man delegation that made a two-hour presentation Monday to IOC officials, seeking to secure the first games in the U.S. for Rupert Murdoch’s News Corp.
NBC and ESPN/ABC will make their case to the International Olympic Committee on Tuesday.
At stake are rights to the 2014 Winter Games in Sochi, Russia, and 2016 Olympics in Rio de Janeiro, Brazil. In a new twist, the networks can also bid on the 2018 and 2020 Games, whose sites have not been selected.
Hill confirmed for the first time that FOX will be seeking the longer-term deal.
”We’re going to go for four,” he said after the presentation. ”If you look at amortization, you have to make a major investment in technical hardware. Anyone will tell you if you advertise that over four years rather than two years, you’re financially in a much better place.”
The three companies will submit sealed bids on Tuesday afternoon, and the IOC could announce the winner by the end of the day or order another round of bidding. It wants a deal in place before the IOC general assembly starts on July 4 in Durban, South Africa.
Hill said FOX will put in separate bids both for 2014-2016 and for the four games combined, but stressed that the eight-year deal is his preference.
”That’s a shot you want to take,” he said.
The IOC said it will weigh up bids for two or four games.
”It makes the decision a little more complex,” IOC TV rights negotiator Richard Carrion said. ”We may have to make a judgment whether we want to go long term.”
It’s the first U.S. rights auction since 2003, when NBC secured the 2010 and 2012 Olympics in a deal worth $2.2 billion.
The IOC says it hopes to surpass that fee this time. If the IOC agrees to a four-games deal, the figure could potentially run between $4-5 billion.
”Yes, we’re expecting an increase,” IOC marketing director Timo Lumme told The Associated Press. ”What that increase is we don’t know. There’s every indication to show that premium sports retains a very, very important position in the programming strategies of the networks.”
Hill went out of his way to lavish praise on Dick Ebersol, the former NBC sports and Olympics chief who resigned suddenly last month in a dispute with Comcast, the cable giant which took control of the network earlier this year.
With Ebersol’s departure, the bidding is considered much more open this time.
Ebersol was a close partner of the IOC, negotiating several multi-games deals that kept the committee’s coffers bulging and ensured the stability of the games in the Olympics’ most important financial market.
”I said to the IOC that I’m going to miss Dick Ebersol hugely,” Hill said. ”Dick and I might have had disagreements on numerous things, but we’ve become great friends. The Olympic movement owes him a huge debt.”
NBC has broadcast every Summer Olympics since 1988 and every Winter Games since 2002, and holds the rights through next year’s London Olympics. Eight years ago, NBC and parent company General Electric outbid the same two competitors, with FOX offering $1.3 billion.
Hill said Monday that history had ”vindicated” his lower bid.
”We went back and looked at our numbers again,” he said. ”I thought my calculator was seriously wrong when the disparity was so great. The numbers came out almost exactly the same. … History will show that our bid last time was pretty much right on the money.”
Comcast executives have made clear they’re not interested in a repeat of the 2010 Vancouver Games, when NBC lost more than $200 million in a rough economy. NBC also stands to take a similar hit from the London Olympics.
”The ownership has indicated to us it is very interested in continuing its Olympic history of NBC,” Lumme said. ”We think the Comcast/NBC combination will be a very strong bidder.”
Hill, wearing a pink open-neck shirt and dark blazer, looked relaxed and joked with reporters going in and out of the meeting. He compared this contest to the 2003 bids.
”It’s all the same – anticipation, nerves, are you doing and saying the right thing,” he said. ”You sit down in a room, you say what you think is right, you work out the numbers and present it to the IOC and hope that you get it. That’s it.”
All three contenders have brought top-level delegations to Lausanne. NBC’s team includes CEO Steve Burke and Comcast chief executive Brian Roberts, while ESPN has chief executive George Bodenheimer and Disney CEO Robert Iger.
”We are quite confident our plan will grow the Olympics,” Bodenheimer said Monday. ”We have more assets that we can put to use than we did eight years, so I feel good about where we are.”
Both FOX and ESPN have said they would carry all Olympic events live, breaking from NBC’s longtime practice of airing most of the games on tape-delay in prime time. ESPN broadcast all the matches live from last year’s World Cup in South Africa.
”We’ve been very vocal about that,” Bodenheimer said. ”Certainly, we believe that live is the way to go.”
ESPN also brings the powerful Disney brand to the table, which raises the prospect of a possible tie-in with the games. GE threw in a $200 million global sponsorship as part of NBC’s winning bid for the 2010 and 2012 Olympics.
If the networks opt for a four-games package, they will do so without knowing where the last two will be held. The IOC will select the 2018 host city on July 6 in Durban. The candidates are Annecy, France; Munich; and Pyeongchang, South Korea. The host of the 2020 Olympics will be chosen in 2013, and Rome is the only official contender so far.