NBCU made $250M from Rio Olympics, despite huge ratings shortfalls

NBC Olympics' prime time studio in Rio

Despite a 15 percent Olympics-over-Olympics viewership drop, NBCUniversal ended up making $250 million in profit from its wall-to-wall Rio Summer Olympics coverage, CEO Steve Burke told investors. 

Speaking at the Bank of America Merrill Lynch 2016 Media, Communications and Entertainment Conference Wednesday, Burke said NBCU took in $1.2 billion in ad sales for the Games, a 20 percent increase over the 2012 London games. 

NBCU and parent company Comcast have paid $12 billion for exclusive U.S. Olympics broadcast rights through 2032. Burke had earlier told investors that the Rio Games would be more profitable than London, which took in $120 million in profit. 

Burke said having 17 days of coverage spanning over myriad linear and digital channels gave NBCU ample opportunity to offer “make-goods” to advertisers for ratings shortfalls. 

“There is so much inventory because you have 17 days, and we're on so many hours during the day that we not only made up make goods during the Olympics, but we actually made up some make good liability that we had in the company that preceded the Olympics.”

Burke was asked if, by broadcasting so many hours of coverage on so many channels, if too much choice confounded viewers.

He added, “There were a whole bunch of different reasons why the ratings were down, some of it was because we put programming at the same time on NBC and on USA, NBC Sports Net, Bravo and other channels. We felt that was important to do because there were times when Michael Phelps would be swimming and the U.S. women's soccer team would be playing in those were both things that people wanted to see.”

Speaking on a variety of other topics, Burke said that NBC is set to take in $800 million in broadcast retransmission fees this year. “That number was zero five and a half years ago,” he said. Our own stations got down to only making about $150 million. We’re making four times that now. So NBC is in very, very good shape.”

For more:
- read this Reuters story
- read this Seeking Alpha transcript

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