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