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Olympics like snow
Some 373 hours, most live, and lots of inventory
By Gabriel Spitzer
Line up NBC’s upcoming 2002 Winter Olympics coverage back to back, and the sports enthusiast could watch the games 24 hours a day for over two weeks solid.
NBC will show 165 ˝ hours of coverage from the games in Salt Lake City, while MSNBC and CNBC will combine for another 208 hours, for a total of 373 ˝ hours of coverage, much of it live, during February. That's 68 fewer hours than it aired for the recent Summer Games in Sydney.
Though officially NBC won't confirm those numbers, that's what the network has been promising TV buyers going into the upfront market.
The heavy cable coverage will make for plenty of ad inventory.
If NBC follows the same formula it did for the 2000 Summer Games, when it promised to air nine minutes of commercials per hour, that same sports enthusiast could also watch 56 hours of just commercials during the Winter Games.
What could be more fun?
Now NBC, which reports that it has sold about 70 percent of its ad inventory so far, must set about liquidating the remainder without cutting its rates too drastically.
As it stands, observers give NBC pretty good odds.
"Given the attraction of the games, and given the location of the games, I put my money on NBC. I think they’re going to get their price, and I think the Winter Olympics will be a significant television success," says Neal Pilson, former president of CBS Sports and currently president of Pilson Communications, a sports consulting company based in Westchester, N.Y.
According to Pilson and others, the challenge for NBC from here on out will be to maintain the integrity of its rate card--that is to say, avoid having to slash rates at the last hour. Among other reasons, the network needs to protect its incumbent advertisers locked up in long-term deals.
"A network can always sell out the Olympics, the question is at what price. They’re saying they’re 70 percent sold out—which is a pretty good number, I think—at their price. This is an effort to convince the holdouts that they’re not going to have to reduce their price," says Pilson.
NBC will have about nine months to sell off its remaining ad time.
In February NBC was about 60 percent sold out, which suggests that the network may have hit a wall in the midst of a lousy ad economy.
Still, even if the network manages to keep up the same pace of selling 10 percent every three months, that would put it at capacity by the time the games begin, not even taking into account the sales spike that usually occurs just before the opening ceremonies.
"My gut instinct is that the Winter Olympics in Salt Lake will do relatively well," says Dean Bonham, chairman of the Bonham Group, a Denver-based sports consulting firm.
"When I look back at the problems with the [bribery] scandal and look forward to the slowing economy, and the level of advertising cuts we’ve seen throughout corporate America, it’s a pretty impressive number they’ve done."
The 373 ˝ hours NBC has slated for the Winter Games is a bit less than the 441 ˝ hours NBC and its cable networks broadcast during the Summer Olympics in Sydney. But one area where the Winter Games will have Sydney beat is live coverage.
Sydney had none. Salt Lake City will have 243 hours—111 on NBC and 132 on cable.
The long tape-delay during the 2000 Summer Games surely hurt ratings; the broadcast averaged just a 13.8 rating during primetime, about 15 percent below the 16.3 NBC had guaranteed to advertisers.
This year NBC is promising a 17.8 primetime rating, a touch higher than the 16.3 CBS delivered during the 1998 Winter Games in Nagano, Japan. The network is also projecting a 0.7 rating for its cable coverage.
NBC is betting that the attraction of live coverage and American hometown pride will pull in both viewers and advertisers.
"It’s much easier for NBC to market the Olympics when they’re in the United States and in our time zone. That’s a big factor for both NBC and the sponsors," says Bonham.
NBC hopes to take in between $750 to $780 million in ad revenues. In Sydney, the network made $900 million, topping its stated goal of $780 million. Even that turned only a small profit for NBC.
Judging by the way the upfronts are shaping up, advertisers are being fairly cautious about committing large sums far in advance. The thinking is that advertisers who are holding off for better deals will fill NBC’s holes come winter.
Last fall NBC sold the last of its inventory for the Sydney Olympics just a week before the torch was lit. During the 1996 Atlanta Summer Games, the network sold over a million dollars in ad time the day the ceremonies opened.
"By the time they reach the opening ceremonies, they’re going to have the vast majority of their inventory sold, if not all of it. NBC does an incredible job promoting, which I think ultimately will translate into a pretty good sales season," says Bonham.
May 29, 2001 © 2001 Media Life
-Gabriel Spitzer is a staff writer for Media Life.
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