The bidding to televise the 2014 and 2016 Olympic Games will inevitably impact the cable TV business. NBC, the former leader and now a dark horse in a three-player race with News Corp.'s (Nasdaq: NWSA) Fox Networks and Walt Disney Co.'s (NYSE: DIS) apparently front-running ESPN. Whoever wins, cable operators can ultimately expect to pay higher carriage or retransmission consent fees-or both.
Disney, with its connection to ESPN as well as ABC could have the upper hand if NBC, now under the more miserly thumb of new owner Comcast (Nasdaq: CMCSA), falters. ESPN already collects $4.40 per subscriber per month from pay TV providers and an Olympics win would undoubtedly jack up that price.
"ESPN practically has a monopoly on big-time sports, boasting the rights to the NFL, NBA and Major League Baseball. With its triumphant coverage of the 2010 World Cup, the network demonstrated it can handle a massive global event," Anthony Crupi explained in an Adweek article.
The downside of ESPN is the possibility that ABC would play only a peripheral role in the broadcasts. Fox's chances are diminished because its audience demographic skews younger and it's possible that the older Olympics audience would be put off. On the other hand, News Corp. does have an international presence. Comcast has taken a much different approach with NBC and the bidding process than former Sports President Dick Ebersol preferred and thus has moved from the front of the pack to the middle or even the back.
ESPN looking seriously at Olympics bid, Disney boss says in earnings call
NBC promises Super Bowl, Olympics will stay on network TV; U.S. homes average 550 feet of cable connecting devices
Comcast, NBC reportedly in Olympian battle over air rights