What canceling the Olympics means for NBCU's Peacock

Summer Olympics Tokyo 2020
Discovery, which handles digital distribution for the Olympics in Europe, will also be impacted the cancellation. (Olympic.org)

After months of speculation, the 2020 Summer Olympics in Tokyo has officially been rescheduled for no later than next summer. The decision could seriously impact NBCUniversal’s upcoming streaming service, Peacock.

The fallout from rescheduling the Games will be widespread, but for Comcast, which televises the weeks-long event, it will come as a big blow. The company predicted it would sell $1.2 billion in advertising, and as of March, it had sold $1.25 billion. As Forbes pointed out, it’s unclear how much of that can be deferred to 2021.

The Olympics cancellation could potentially hamstring Peacock, too, which is planning to launch in April. Peacock – which will have a free tier along with Premium for $4.99 per month (or $9.99/month ad-free) – will have more than 15,000 hours of content including original series. However, the service was counting on the Olympics to give it a boost early on. Outgoing NBCUniversal CEO Steve Burke said his company intended to use the 2020 Summer Olympics as an “afterburner” after the launch.

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Now, Peacock will have to launch without the Olympics, and it could impact both subscriber and advertising revenue for the fledgling service. The Olympics cancellation due to the coronavirus is just one of the ways that the outbreak is hurting Comcast’s business. The company has also had to close it theme parks and delay theatrical releases. In an SEC filing, the company said the full extent of how coronavirus impacts its business will depend on the governmental measures taken to stop the spread and how long they are in place.

“At this point, it is impossible to predict such extent and duration and the degree to which supply and demand for our products and services, including advertising, will be affected. This uncertainty makes it challenging for management to estimate the future performance of our businesses, particularly over the near to medium term. However, the impact of COVID-19 could have a material adverse impact on our results of operations over the near to medium term,” the company wrote.

Discovery, which handles digital distribution for the Olympics in Europe, will also be impacted the cancellation.

“Discovery fully supports the IOC and the Tokyo 2020 Organizing Committee’s plan to stage the Olympic Games in 2021 and to make every effort to ensure the well-being of spectators, athletes, staff and the international community. Our essential planning and deliverables are complete and will now shift into next year.  We will continue to develop our products and offerings to best serve our customers and marketing partners in 2021,” the company said in a statement.