With the 2012 London Olympics approaching, it is only fitting
to say that one of the biggest stories of 2011 was NBC’s bid for the rights to
the Olympics. “The International Olympic
Committee spent almost three years courting networks to bid on its U.S.
television rights.” The committee
decided to wait until 2011 to begin the bidding process due to the
economy. This decision proved to be a
wise decision. NBC bought the rights to
the Olympics through 2020, for the price of $4.4 billion. NBC outbid its competitors such as Walt
Disney Co., owner of ESPN and ABC by $800 million (Sports Business Daily).
NBC holds the rights for four Olympic games. “The
2014 Winter Games in Sochi, Russia, will cost $775 million. The 2016 Summer
Games in Rio de Janeiro will cost $1.2 billion. The 2018 Games will run $863
million, and the 2020 Games will cost $1.4 billion. The locales for the 2018
and 2020 games have not been determined yet” (LA Times). According to the LA Times, NBC lost $233
million on the 2010 Games and could potentially lose a similar amount for the
2012 London games. Part of NBC’s
strategy for Olympic coverage is to show all events live. USA Today reports this is different from the
2010 Olympics, where they held “best
events for prime time even on tape-delay” (USA).
Although NBC won the bidding war for the rights to the
Olympics, why would they bid in excess of $800 million? Typically, the bid gaps between large
companies are closer than this. It is
uncanny to me that NBC would present such a large dollar amount for the rights
to the Olympics, when they lost $233 million on the 2010 games and while we are
facing such difficult economic times. To
the average American this would seem like a waste of hard earned money. To the philanthropists it would seem that
this money could be appropriated toward a well deserving charity. For these reasons, I have chose this as one
of the top stories of 2011.
