Monday, February 08, 2010

You Gotta Spend Money to Lose Money:: CTV & NBC

Image:: 2010 Olympic Mascots, expected to bring in $600M CAN in sales, 
which is more of a sure thing than CTV's prospects from broadcasting the games.

Way back in 2005, a CTV-Rogers consortium put forth a whopping $90M CAN for the rights to the 2010 games in Vancouver, which was more than the $63M for the rights to the 2012 London summer games. It was the first time the winter Olympics broadcasting rights were more than the summer games. NBC, way back in 2003, sealed the deal to cover the 2010 and 2012 Olympics at a astronomical $2B US pricetag, broken down at $820 and $1.18B, plus their parent corporation, GE, sweetened the deal by being a global sponsor at the tune of $160-$200M.

Fast forward to 2010 and the economic climate is quite different. Advertisers are reeling from lower revenues from the Big Recession and NBC has gone from a ratings powerhouse to a straggler. Dick Ebersol, chairman of NBC Sports said the network will lose money on the games, blaming the high cost of broadcasting rights. Ebersol said that the ad sales for Vancouver were on par with Salt Lake City and Torino, but the rights are turning it into a lose. It will be interesting to see what the sales numbers actually are. Well, nobody put a gun to NBC's head to outbid Fox {News Corp.}.

The CTV-Rogers consortium is reportedly short of the $200M CAN, including marketing and production costs, required to break even. The consortium thought it could sell ads across the consortiums vehicles, but advertisers balked at the pricetag.

Twitterversion::  You gotta spend money to lose money. CTV-Rogers & NBC are both likely to lose money on 2010 Olympic Games. @Prof_K

Song::"Slow Learners" The Paperbacks {Vancouver, BC} from Lit from Within (2010)

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