IOC delaying TV rights talks
LAUSANNE, Switzerland -- The International Olympic Committee is holding off negotiating the next round of U.S. television rights and could delay the high-stakes bidding again until next year because of the fragile state of the American economy and weakness in the advertising market.
Richard Carrion, the IOC official who handles the TV negotiations, said in an interview with The Associated Press that the unfavorable financial climate makes it unwise to seek a deal now with U.S. broadcasters for the 2014 and 2016 Games.
"We're in no hurry yet," Carrion said. "It's more the economic environment that shapes these things. We still see a fragile economy in the U.S. ... There is a lot of change going on in the market.
"When all that translates into some optimism on the part of advertisers, I think we'll make our move. But right now, I don't see it. Maybe not until next year."
By this time in the last four-year cycle, the IOC had already secured two-thirds of its TV dollar revenues. This time, it is only about 10 percent, Carrion said.
"We have had the worst economic recession and financial market turmoil in the last 80 years," he said. "In that sense, it has made sense to wait."
The U.S. negotiations had already been postponed in 2009 because of the global financial crisis. The IOC had hoped to open the bidding sometime this year, but that now appears doubtful.
"We haven't even talked about starting it," Carrion said. "I don't see us moving very quickly in the U.S."
At stake are the exclusive broadcast rights to the 2014 Winter Games in Sochi, Russia, and 2016 Summer Olympics in Rio de Janeiro. U.S. rights represent the biggest single source of income for the Olympic movement.
In 2003, NBC secured the rights to the 2010 Vancouver Winter Games and 2012 London Olympics in a deal worth $2.2 billion.
Along with NBC, potential contenders this time include ESPN-ABC, Fox and CBS and Turner.
"They've all said, 'Yes, we're interested," Carrion said. "When we start the process, we'll know who's there and who's not there."
Carrion, a banking executive from Puerto Rico who chairs the IOC finance commission and sits on the IOC executive board, said there has been only informal contact with the broadcasters so far.
"We say hello," he said. "We've talked in general terms, nothing very specific. We're looking at what's going on."
Although NBC reported losses of $223 million on the Vancouver Games in the first quarter, Carrion said the network drew strong ratings and has indicated it would like to bid again.
"I don't think they're masochists," he said. "I believe business deals need to be good for both sides. We get no joy if our partner is losing money."
Cable giant Comcast Corp., meanwhile, is seeking government approval to acquire a 51 percent stake in NBC Universal from parent company General Electric. The Federal Communications Commission and the Justice Department are expected to approve the deal with conditions that are not yet known.
Carrion said he expects the Comcast-NBC deal to be finalized by the end of the year or early next year, another reason for delaying the rights negotiations.
"We'll see how that one plays out," he said. "It is deal that is about content, so I can only see positive things from our point of view. We think we have probably the most valuable piece of sports content on the planet."
Carrion cited a growing shift toward new or digital media, including mobile and hand-held devices which could be "game-changers" in how viewers watch the Olympics.
"That increases the size of the audience," he said. "The real question is how do you monetize those hours?"
Carrion said he took special interest in the recent 14-year, $10.8 billion deal signed by CBS and Turner Broadcasting to televise the NCAA men's college basketball tournament in the U.S.
"That's a big ticket," he said. "I was curious to see a consortium being formed by TNT and CBS. Maybe that's what you'll be seeing. That was a big commitment for a lot of years. That's a huge property. We'll see."
With Asia showing signs of economic growth, Carrion said the IOC may move soon to strike broadcast deals in that region for 2014/16. TV contracts are still pending in major European markets such as Britain, Germany and France.
TV rights deals worth about $3.9 billion have already been secured for the four-year cycle covering the Vancouver Games and 2012 London Olympics, with a few small contracts still to be awarded, Carrion said.
Carrion said the IOC's own finances remain solid, with reserves of about $500 million.
"It's been a good test of all our policies that we've managed to come out of this thing relatively unscathed and in pretty good shape," he said.
The IOC is hoping to finalize multimillion-dollar deals with two or three new global sponsors, including Dow Chemical and Procter & Gamble. The IOC currently has nine top-tier sponsors for the current cycle.
Copyright 2010 by The Associated Press