NBC Is Looking for Big Payoff on Olympics

Two years ago, the Winter Games in Vancouver were just beginning. When they ended, NBC Universal reported a loss of $223 million.

Now, with the Summer Games in London five months away, NBC is hoping to avoid a big loss on its $1.18 billion rights fee, the most paid for the Olympics by a United States network.

So far, sales appear to be off to a strong start. Seth Winter, the senior vice president of the NBC Sports Group, said last week that national advertising sales for the London Games were just above $900 million.

“We’re in extraordinarily good shape,” he said. “This is my third Olympics overseeing sales for NBC Sports, and this is the first Olympic Games that we’ve had a healthy economy.”

Sales have already exceeded the $850 million for the 2008 Beijing Summer Games, for which NBC paid $893 million to the International Olympic Committee to buy the broadcast rights.

Winter said that the automotive category was healthy and that two carmakers, General Motors and BMW, would be the only ones advertising on NBC’s Olympic broadcasts.

One part of NBC’s strength heading into the Games is a healthy sports advertising economy, especially for major events. Many of the advertisers for last week’s Super Bowl have also committed to the Olympics. The second positive is a large expansion of the amount of advertising time that NBC will be selling on its digital platform.

Winter said that “we really don’t look at” the $1.18 billion rights fee as the target for his sales division. “We’re pressed with maximizing the revenue we can at the best premium price we can,” he said. “In terms of targeting a number based on our costs, that’s another part of the company. But we’re mindful of it.”

Much has changed since the Vancouver Games. Comcast took over NBC Universal, then combined their sports properties into the NBC Sports Group. And Comcast continued NBC’s two-decade-long domination of the Olympics by agreeing last June to buy the rights to the four Olympics from 2014 to ’20 for $4.38 billion.

As reported in the NY Times