“Bad Luck” Has Kept Tokyo Olympics TV Ratings Below Forecasts, NBCUniversal CEO Jeff Shell Concedes, But Profits And Peacock Perks Remain

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NBCUniversal CEO Jeff Shell concedes that linear ratings for the 2020 Tokyo Olympics have been lower than expected, but says the company will still book a profit on the star-crossed Games.

“We had a little bit of bad luck, there was a drumbeat of negativity, the Games got moved a year, no spectators,” Shell said during Comcast’s second-quarter earnings call with analysts. The negatives have created a drag on the linear side, but “the flip side is that the digital strength has kind of offset that. … Net-net, with all this bad luck, we’re going to be profitable on these Olympics, which we’re very happy with.”

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Shell did not offer any specific numbers, noting there is still “a long way to go” before the closing ceremony on August 8. The 2016 Rio Olympics, the company has said, produced a profit of $250 million. Because of the way Comcast and NBCU organize their accounting, the Games are not broken out as a line item in financial reports, but execs have often sprinkled figures into their public remarks.

Along with the saga of Covid-19, which has kept arenas empty and wreaked havoc with the competition lineups, there have also been downbeat surprises with the athletes. Perhaps none has been bigger than the No. 1 gymnast in the world, Simone Biles, withdrawing from the team and individual competitions this week. That robbed NBCU of one of the few recognizable faces of the Games.

“We’ve had some bad luck,” Shell said again, never mentioning any athletes by name, “but if you look at the product, it’s fantastic. On Peacock, what we learn on this Olympics, we will take to Beijing [in winter 2022] and change the product, change the offering.”

Some users have complained on social media about the dynamics of Peacock and the work-in-progress fit with the company’s broadcast and cable networks.

“We’re learning a lot as consumption continues at the Olympics,” Shell said. “Not to ruin anybody tuning in, but a big upset just happened in the past hour and you can tune in tonight on NBC to see that.” (His tease typified the balancing act the company faces with Games outside the U.S. time zones — though anyone within reach of a smart phone knew Shell was referring to Suni Lee’s gold medal.)

Is all of this hassle worth it? “It’s impossible to overstate the importance of the Olympics to NBC and NBCUniversal,” Shell said. “It’s not really financially, it’s more operationally across the company. We have 4,000 people working on it.” The Games also provide a showcase for the company’s broadband and TV platforms and offer it a “firehose” with which it can spray out promotions for a range of other offerings.

Shell said the Games have been a key reason why Peacock has reached 54 million sign-ups and 20 million monthly active accounts, which is “much further ahead than we expected to be at this point.”

Asked by an analyst about the spending outlook, he said the company will “probably” boost spending on content, at least modestly. But Shell expects a number of high-profile bits of programming to land between 2022 and 2024. He cited a big-ticket green-light of three Exorcist sequels from Blumhouse, which provide “optionality” with release windows and, he said, would only have been possible with Peacock in the mix.

Universal Studios movies next year will start going to Peacock after their electronic sell-through and transactional VOD availability in a new pay-1 setup. In 2024, a large number of Hulu titles not already back in the Comcast fold will revert to Peacock as per an agreement with Disney, which now fully controls Hulu.

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