The Olympics in Rio are up and running. Despite all of the warnings about crime and the Zika virus, there has been very little bad news to come out of the Games. As I write this, the United States is doing very well (men’s gymnastics aside) and, as is often the case, television viewership ratings rise as the Games proceed. NBC and their family of cable channels do a marvelous job of covering what must be a monumental challenge. Being a very small part of the business of television, I find it mind-boggling to think of what goes into producing and televising the Olympics. Between the set-up for all the venues and the personnel necessary to man the events, the organization and the price tag must seem like running a small country.
According to Forbes, the cost just to acquire the rights to televise from the IOC is just over $1 billion. NBC recently just extended their contract for 6 Olympics through 2032 at a cost of $7.75 billion. This does not include the cost of ACTUALLY producing the event. That price tag is estimated at a little over $1 million per year. So can it possibly be worth it?
The audience size (21 million plus per night) approaches NBC’s Sunday Night Football, the network’s most watched program. More women watch the Olympics than men and the audience is made up of viewers with higher than average incomes. This is an advertiser’s dream. Couple that with the fact that the other networks tend not to challenge the Olympic broadcasts. Reruns are the norm, with even LIVE shows taking a couple of weeks off.
NBC has announced that they broke revenue records this year with over $1 billion of advertising sales. The audience profile and the ability to televise most events LIVE because of the one-hour time zone difference made this year a very attractive product. And it never hurts that advertising during the Olympics looks like a very patriotic thing to do.
Ironically, the largest advertiser is NBC itself. The Olympics is the perfect way to promote their programming and their other cable channels. In addition, the Olympics draw a huge audience on digital devices, which is the future of broadcasting. Getting more and more eyes on mobile devices, social sites, and online cannot be a bad thing.
So, with an expense budget of a small country, does NBC make or lose money on the Olympics? It appears they come very close to breaking even financially, but they certainly are winners when you account for all of the positive intangibles they acquire.
Everyone from upper management, to the talent, to the various crews that man the events, can take pride in knowing that “going for the gold” has pretty much been accomplished.
ABOVE THE EARS (SOME MUSINGS)
- For some reason, I did not think I would get into the Olympics like years past. I was wrong. As soon as I am going around the dial, I find I stop on them and get caught up in all the interesting stories and the events themselves.
- Rio should be very upset with the media for keeping people away with all of their foreboding of crime and Zika. Now reporters are saying the Olympic area is like any other big city – know where and where not to go and you will be fine andit seems, so far, mosquitoes took the two weeks off.
- Alex Rodriguez of the Yankees will play his final game on Friday, August 12. He will not play next year and still make $28 million. He signed for 10 years in 2007 for $275 million. If you are looking to retire, try to get his “exit plan”.
- If you are a “Seinfeld” fan and you are looking for a good summer read, check out Seinfeldia: how a show about nothing changed everything by Jennifer Armstrong. It is an interesting read about all the inner workings of the show and the characters.
- High school football begins the RCN season on Friday, August 26, with Central Catholic at Freedom. LIVE at 7:00.
