NBCU Chief Says Company Nabbed More Than $250M In Olympics Profit

Brian Steinberg

NBCUniversal CEO Steve Burke has bragged for some time that his company’s broadcast of the 2016 Summer Olympics would be its “most profitable.” Now he can boast of his prognostication skills as well.

NBCU snared more than $250 million in profit from its 17-day broadcast of the events from Rio de Janeiro, Burke said at an investor conference Wednesday, despite noticeable ratings shortfalls in viewing of the Games on its flagship broadcast outlet, NBC. The executive cited a 20% jump in ad sales over the amount of inventory distributed at NBCU’s London Olympics in 2012 and the overall structuring of its Olympics rights deals as factors in the financial performance.

“Ratings were down,” Burke acknowledged at a conference organized by Bank of America Merrill Lynch. “Some of it was because we put programming on at the same time on broadcast and on USA and on NBC Sports Net and others. We felt that was important to do, because there were times when Michael Phelps was swimming and the U.S women’s soccer team was on. We thought those were both things people wanted to see.” By NBCU’s internal measures, he said, total audience delivery  – which includes cable broadcasts, streaming and other kinds of digital consumption – was down in the “single digits” when compared with the company’s efforts in London. “We are not in any way concerned.”

The economics of the Olympics are well scrutinized at NBCU and its parent company, Comcast. The Philadelphia cable-and-content giant agreed in 2011 to pay $4.4 billion for U.S. broadcast rights to the Olympics through 2020, and another $7.75 billion for the rights to the Games through 2032.

Advertisers in the Olympics did not suffer because of ratings drops, Burke said. All were granted what is known as “make goods” during the Olympics broadcast if the ratings guarantees for their deals were not met. In addition, he said, NBCU was able to give make goods to other advertisers who may have required them prior to the Olympics. “We are carrying less make-good liability than when we went in,” he noted.

While viewing levels did not meet the “high water” mark set in 2012, said Burke, the Olympics still delivered more viewers than anything aired by Fox, CBS or ABC during its time on the air. “If you are an advertiser who has a big brand or who wants to change consumer perception, those 17 days of the Olympics are almost invaluable,” he said. “You almost can’t put a price tag on them.”

He suggested many members of the Rio Olympics advertising roster had expressed interest in returning for NBCU’s broadcasts of coming Olympics in Korea and Japan.

 

 

 

 

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