IOC com­fort­ably on course for record me­dia rights rev­enue from 2014 and 2016 Olympic Games

Sportcal - - CONTENTS - by Martin Ross

The In­ter­na­tional Olympic Com­mit­tee seems cer­tain to gen­er­ate record rev­enues from the sale of broad­cast rights for the 2014 win­ter Olympics in Sochi and the 2016 Olympics in Rio de Janeiro, build­ing on the $4 bil­lion gen­er­ated in the cur­rent two-games pe­riod.

Broad­cast rights deals cov­er­ing the 2014 and 2016 games, and in some cases be­yond, have al­ready been struck by the IOC in key ter­ri­to­ries, with some no­table in­creases in fees. Jac­ques Rogge, the IOC pres­i­dent, re­vealed 12 months ago that the or­gan­i­sa­tion had al­ready raised $3.2 bil­lion from broad­cast rights sales for the Sochi and Rio games and that, with many deals still to be con­cluded, he expected the to­tal to be “sub­stan­tially” higher than $4 bil­lion.

The IOC’s head­line deal go­ing for­ward is un­doubt­edly the record $4.38-bil­lion US rights agree­ment with NBC, the Com­cast-owned tele­vi­sion net­work, cov­er­ing four games from 2014 to 2020. NBC is pay­ing $2 bil­lion for the rights to the Sochi and Rio games. The net­work paid $2.2 bil­lion (in­clud­ing $200 mil­lion in spon­sor­ship fees) for the rights to the 2010 win­ter Olympics in Van­cou­ver and this year’s Olympics in Lon­don.

US rights sales have ac­counted for a sig­nif­i­cant pro­por­tion of IOC in­come for sev­eral decades and the cur­rent deal rep­re­sents around half of the pro­ceeds from world­wide Olympic broad­cast rights.

In Europe, the IOC took the de­ci­sion to ne­go­ti­ate in­di­vid­ual deals in the ‘big five’ ter­ri­to­ries of France, Ger­many, Italy, Spain and the UK, as well as in the emerg­ing mar­ket of Tur­key, for the 2014 and 2016 games. Con­tracts have been signed in five of the six coun­tries, with the only ex­cep­tion be­ing the UK, where the IOC re­cently launched a ten­der process for the rights.

In 2008, the IOC signed a € 152-mil­lion ($190-mil­lion) rights deal with Sky Italia, the Ital­ian pay-tele­vi­sion broad­caster, and a € 25-mil­lion deal with Fox in Tur­key cov­er­ing the rights to the Sochi and Rio Olympics. Both deals rep­re­sented healthy in­creases on the fees paid in the two coun­tries for the Van­cou­ver and Lon­don games.

TVE, the Span­ish pub­lic-ser­vice broad­caster, paid € 70 mil­lion for the rights to the 2014 and 2016 games, while France Télévi­sions, the French pub­lic-ser­vice broad­caster, signed a four-games deal that runs un­til 2020 and is worth be­tween € 160 mil­lion and € 200 mil­lion. The IOC has also ne­go­ti­ated a new rights deal in Ger­many with ARD and ZDF, the pub­lic-ser­vice broad­cast­ers.

Out­side the ‘big five’ ter­ri­to­ries and Tur­key, the IOC agreed a deal for the re­main­ing Euro­pean ter­ri­to­ries with Sport­five, the in­ter­na­tional sports mar­ket­ing agency, spell­ing the end of its long-run­ning as­so­ci­a­tion with the Euro­pean Broad­cast­ing Union, the um­brella body of mainly pub­lic-ser­vice broad­cast­ers. Sport­five’s min­i­mum guar­an­tee-plus-com­mis­sion deal cov­ers the rights in 40 Euro­pean ter­ri­to­ries and is worth around € 250 mil­lion.

To date, Sport­five has agreed deals with broad­cast­ers for the 2014 and 2016 games in nine ter­ri­to­ries: Aus­tria (ORF and ATV); Azer­bai­jan (ITV); Bel­gium (VRT); Fin­land (YLE); the Nether­lands (NOS); Nor­way (TV2 Nor­way); Swe­den (Mod­ern Times Group); and Switzer­land/ Liecht­en­stein (SRG SSR).

The deal to be con­cluded by Sport­five in Rus­sia is seen as key to the over­all suc­cess of the sales project given the large tele­vi­sion au­di­ence and the fact that Sochi will host the 2014 win­ter Olympics. An in­vi­ta­tion to ten­der was launched back in Septem­ber 2010 but there is, as yet, no broad­caster in place.

Speak­ing in Fe­bru­ary, when Olympic deals in some seven ter­ri­to­ries had been an­nounced, Timo Lumme, manag­ing di­rec­tor of IOC Tele­vi­sion & Mar­ket­ing Ser­vices, said that the IOC was “very happy” with the

work done by Sport­five in sell­ing rights in Europe.

He said: ‘‘There is a time when the tim­ing be­comes im­por­tant but I think there’s plenty of time. At the stage when you get 12 months in [be­fore the games start] then ob­vi­ously you’ll start tak­ing a view on at least some of the larger ter­ri­to­ries. They’ve an­nounced seven ter­ri­to­ries, they’ve done good deals there and we know they are work­ing hard on the oth­ers. You can only do rights deals which are ap­pro­pri­ate and at the right level ac­cord­ing to the speed that the mar­ket lets you do them at.’’

‘‘One of the rea­sons we did the ten­der when we did was to make sure that who­ever had the rights has got a good run-up to it. There is the rel­a­tive lux­ury of time and they have time, we know they are work­ing on var­i­ous mar­kets as we speak and we’ll ex­pect news to come. They are do­ing a good job and we ex­pect more good news. We’re very happy with the re­la­tion­ship and the work they’re do­ing.’’

Out­side Europe and the USA, the IOC has fi­nalised rights deals in var­i­ous ma­jor ter­ri­to­ries for the 2014 and 2016 Olympics. These in­clude Brazil, where agree­ments with free-to-air broad­cast­ers Globo, Ban­deirantes and TV Record were signed be­fore Rio was awarded the Olympics. These are worth $170 mil­lion, nearly triple the value of the pre­vi­ous deals, and un­der­line the in­creas­ing value of the BRIC coun­tries (Brazil, Rus­sia, In­dia and China) to the IOC.

There is also the se­cu­rity of a long-term rights deal in South Korea with SBS, the com­mer­cial free-to-air broad­caster, which last year ex­tended its as­so­ci­a­tion with the Olympics up to and in­clud­ing the 2024 games.

Mean­while, the Ja­pan Con­sor­tium, a con­sor­tium of Ja­panese broad­cast­ers, has ex­tended its rights deal to in­clude the 2014 and 2016 games in an agree­ment worth Y36 bil­lion ($453 mil­lion). The Ja­pan Con­sor­tium, which in­cludes na­tional broad­caster NHK and the Na­tional As­so­ci­a­tion of Com­mer­cial Broad­cast­ers of Ja­pan, com­pris­ing NTV, TV Asahi, Fuji TV, TBS and TV Tokyo, held the rights in the 2010 and 2012 games cy­cle in a deal worth Y32.5 bil­lion.

Ma­jor ter­ri­to­ries in which broad­cast deals for 2014 and 2016 have still to be signed by the IOC (at the time of go­ing to press) in­clude, among oth­ers, Aus­tralia, Canada, China and the UK.

In Aus­tralia, the IOC has been mon­i­tor­ing moves in the sports rights in­dus­try be­fore go­ing to mar­ket and may await the con­clu­sion of ne­go­ti­a­tions on tele­vi­sion deals for the coun­try’s Na­tional Rugby League be­fore launch­ing a ten­der. Nine Net­work, the com­mer­cial freeto-air broad­caster, and pay-tele­vi­sion op­er­a­tor Fox­tel are the cur­rent Olympic rights-hold­ers in Aus­tralia.

In Canada, the IOC will have noted the re­cent news that CBC, the pub­lic-ser­vice broad­caster, and Bell Me­dia, the mul­ti­me­dia com­pany that owns free-to-air com­mer­cial net­work CTV, have aban­doned plans to bid jointly to ac­quire broad­cast rights in the next two-games cy­cle. The duo formed a part­ner­ship last year but failed with two bids, both thought to be in the re­gion of C$70 mil­lion ($68.2 mil­lion), for the rights to the 2014 and 2016 Olympics.

The bids were made amid con­cerns that NHL play­ers might not par­tic­i­pate in the ice hockey tour­na­ment in 2014, which would make the event much less at­trac­tive to Cana­dian view­ers. Rogers Me­dia, the par­ent com­pany of ca­ble tele­vi­sion net­work Sport­snet, ac­quired the rights for the 2010 win­ter Olympics on home soil and the Lon­don 2012 Olympics as part of a con­sor­tium that also in­cluded CTV in a $153-mil­lion deal, but has ruled it­self out of the bid­ding for the 2014 and 2016 rights.

In the Mid­dle East, the Arab States Broad­cast Union, the um­brella body of free-to-air broad­cast­ers, ac­quired the rights to the 2014 and 2016 Olympics in a deal worth $32 mil­lion, an in­crease of around $11 mil­lion on its pre­vi­ous deal, al­though that agree­ment cov­ered only the 2012 Olympics and not the 2010 Van­cou­ver games.

Lon­don 2012 3D and ‘Su­per HD’ Cov­er­age

The Lon­don 2012 Olympics will be the first to be cov­ered live in 3D af­ter Olympic Broad­cast­ing Ser­vices, the IOC’s host broad­cast­ing arm, reached an agree­ment with the IOC TOP spon­sor Pana­sonic to pro­vide equip­ment and tech­nol­ogy to fa­cil­i­tate the ser­vice. OBS is to of­fer par­al­lel live cov­er­age in 3D from a se­lect num­ber of venues, along with daily 3D high­lights, to rights-hold­ing broad­cast­ers. Over­all, OBS will pro­duce over 230 hours of 3D cov­er­age of the games, in­clud­ing the open­ing and clos­ing cer­e­monies.

The ap­petite for 3D cov­er­age has var­ied from ter­ri­tory to ter­ri­tory. The BBC is to pro­vide 3D cov­er­age of the men’s 100 me­tres fi­nal, parts of the open­ing and clos­ing cer­e­monies and a nightly high­lights pro­gramme, as it con­tin­ues to ex­per­i­ment with the tech­nol­ogy to as­cer­tain the in­ter­est of the view­ing pub­lic.

How­ever, the BBC’s head­line of­fer­ing in its ‘Dig­i­tal Olympics’ cov­er­age is the 24 live high-def­i­ni­tion streams that will pro­vide 2,500 hours of live cov­er­age from the games, avail­able via the BBC Sport web­site and through the BBC’s ‘Red But­ton’ ser­vice on plat­forms in­clud­ing those of BSkyB, Vir­gin Me­dia and Freesat.

NBC plans to make 3D cov­er­age avail­able from this sum­mer’s games to all US dis­trib­u­tors that carry its chan­nels, in­clud­ing ca­ble, satel­lite and tele­coms op­er­a­tors, while Eurosport, the pan-Euro­pean broad­caster, is to of­fer over 100 hours of 3D cov­er­age on Sky 3D and Vir­gin Me­dia in the UK, as well as in Pana­sonic re­tail out­lets across Europe.

Sky Italia is to show round-the-clock cov­er­age of the games, with over 2,000 hours to be broad­cast live through 12 HD chan­nels and one 3D chan­nel, which can be ac­cessed in­ter­ac­tively through a ‘green but­ton’ on a mo­saic com­posed of 12 win­dows.

Mean­while, France Télévi­sions, the French public­ser­vice broad­caster, is to show over 200 hours of 3D cov­er­age of the Olympics on a spe­cially-cre­ated tele­vi­sion chan­nel on the plat­form of tele­coms op­er­a­tor Orange. Canal Plus, the French pay-tele­vi­sion broad­caster, has stopped broad­cast­ing on its 3D chan­nel be­cause of an ap­par­ent lack of view­ers and avail­able con­tent, with con­sumers slow to in­vest in the nec­es­sary equip­ment and the up­take of new tech­nol­ogy fail­ing to match that of HD.

There are no plans for 3D cov­er­age of the games in the other ma­jor Euro­pean tele­vi­sion mar­kets of Ger­many and Spain.

ARD and ZDF are, per­haps sur­pris­ingly, not plan­ning any Ger­man 3D cov­er­age or in­deed any cov­er­age on their dig­i­tal chan­nels of the Lon­don Olympics, in­stead re­ly­ing on their con­ven­tional chan­nels and the in­ter­net to broad­cast the games amid cost cut­ting, while in Spain, TVE has no plans for 3D cov­er­age af­ter its bud­get for 2012 was re­duced by 25 per cent.

Olympic broad­cast­ers that do plan to of­fer 3D cov­er­age from Lon­don in­clude Aus­tralia’s Nine Net­work, Vi­asat, the Scan­di­na­vian pay-tele­vi­sion broad­caster, and ESPN Latin Amer­ica.

OBS will test ‘Su­per HD’ or ‘Su­per Hi-Vi­sion’ cov­er­age in Lon­don in part­ner­ship with de­vel­oper NHK, the na­tional broad­caster in Ja­pan that holds Olympic broad­cast rights.

Su­per HD im­proves the pic­ture qual­ity of HD cov­er­age by a fac­tor of 16 in terms of pix­els and clar­ity and is con­sid­ered to be par­tic­u­larly ef­fec­tive for larger screens and pub­lic view­ing events. It is de­signed to be ex­pe­ri­enced as a wide cam­era an­gle shot to give the au­di­ence a feel­ing they are ac­tu­ally at the event.

Lumme re­cently de­scribed the de­vel­op­ing tech­nol­ogy as “ex­cit­ing and mind­blow­ing” and said that there would be some test­ing at the In­ter­na­tional Broad­cast Cen­tre in Lon­don, al­though it re­mains “one for the fu­ture.”

There will be spe­cial Su­per HD screen­ings in the UK dur­ing the Olympics and the BBC has cre­ated three Su­per Hi-Vi­sion cine­mas in the UK (in Lon­don, Brad­ford and Glas­gow).

Given the now-wide­spread pen­e­tra­tion of smart­phones and tablet com­put­ers and the in­creased num­ber of broad­band con­nec­tions around the world, the multi-plat­form con­sump­tion of Olympics cov­er­age is cer­tain to rise this year. The 2010 win­ter Olympics marked a sig­nif­i­cant shift in con­sump­tion habits as there was at least same amount of cov­er­age on on­line and mo­bile plat­forms world­wide as there was on tele­vi­sion.

The IOC opted to re­tain its dig­i­tal rights for Lon­don 2012 in most ter­ri­to­ries in Asia and sub-Sa­ha­ran Africa and stream live cov­er­age on YouTube, the Google-owned live stream­ing and video shar­ing web­site. Live cov­er­age and high­lights clips will be avail­able for free on the IOC’s YouTube chan­nel in 64 ter­ri­to­ries in a con­tin­u­a­tion of the pol­icy adopted for the 2008 Olympics in Bei­jing, al­beit there was no live in­ter­net cov­er­age four years ago.

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