In a move reflective of the sports-mad nature of media and entertainment, if not the fan base, Comcast's (NASDAQ: CMCSA) NBCUniversal media unit has plunked down $7.65 billion for the right to televise the Olympics through 2032.
The deal makes sense for Comcast, which has raved about the success of its Olympics programming across multiple connected TV and Internet platforms and the International Olympic Committee (IOC) which said it distributes 90 percent of the revenue it generates to support international sports federations. Unlike with regional sports networks (RSNs), the amateur athletes who compete in the Olympics should not benefit monetarily from the deal.
"The Olympics are the world's greatest cultural and athletic event and presenting them to the American audience is an honor and privilege for our entire company," Brian Roberts, Comcast's chairman-CEO said in an IOC press release. "Our long-term commitment to and investment in the Olympic movement are a reflection of our belief in the future of broadcast television, as well as our confidence that our partners at the IOC will continue to deliver great games and the Olympics will remain the world's premier sports event."
While Roberts mentioned broadcast television, NBCUniversal CEO Steve Burke, who called the signing "one of the most important days in the history of NBCUniversal," included in the other facets that will make the deal profitable for Comcast because it will run across cable, digital and mobile platforms as well as broadcast.
"Today's announcement guarantees that this massively popular and profitable programming will continue to air every two years," said Burke. "No event brings families together like the Olympics and no one in the media is more accomplished or better equipped to tell the athletes' stories than NBC Sports."
The signing also comes at a critical juncture for Comcast as it attempts to acquire Time Warner Cable (NYSE: TWC) for $45.2 billion and for sports programming in general, which has become increasingly enmeshed in cost-related rights issues.
The latest broadcast hot spot is Los Angeles where Time Warner Cable reportedly paid more to broadcast the Dodgers baseball team than Comcast paid for the Olympics and where, according to critics and competitors, it's trying to haul in Olympian fees from those competitors for the rights to is regional sports network (RSN).
"Time Warner Cable did an unprecedented deal far above any rational view of the market for a premier baseball team and created another channel that only has content six months of the year," DirecTV (NASDAQ: DTV) CFO Patrick Doyle told analysts during a first quarter earnings call.
DirecTV, among other providers in the area, is still trying to work out the details of how much it is willing to pay--and charge--its subscribers for the service.
- the IOC has this press release
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