With exactly one month to go before the Opening Ceremonies of the London 2012 Summer Olympic Games, NBC is on track to book nearly $1 billion in ad sales revenue for the 17-day event.
Speaking Wednesday morning from 30 Rock’s fabled Studio 8H, Seth Winter, NBC Sports Group evp of sales and sales marketing, said he was “very pleased” with how the ad dollars were stacking up, given that NBC is expected to generate as much as $950 million in Olympics sales, or around $100 million more than it did in 2008.
Winter added that NBC was, for all intents and purposes, sold out of its available inventory, although he noted that the network always holds back some contingency time. Meanwhile, talks with sponsors of the 2014 Winter Games in Sochi, Russia, and the 2016 Olympics in Rio de Janeiro, Brazil, are in the “early innings.”
Winter told Adweek that NBC has lined up dozens of new sponsors for the London Games, a roster of clients that includes Chobani Greek yogurt (an official sponsor of the U.S. Olympic Team) and Fruit of the Loom. “One of the great things about selling the Olympics is, the audience is almost evenly split between male and female viewers,” Winter said. “So we have a much broader definition of what our endemic categories are.”
Other confirmed advertisers include McDonald’s, Visa, Procter & Gamble, AT&T and Coca-Cola. AT&T in 2011 was the biggest spender on network TV, investing $740 million in national broadcast. The two official auto sponsors are General Motors and BMW.
GM closed its sponsorship deal with NBC in January 2011, long before the automaker began to make waves in the national TV marketplace with talks of slashed spending and hard-line upfront posturing.
Ad sales revenue is obviously crucial for NBC, which lost $223 million on the 2010 Vancouver Games after making a profit of $100 million on Beijing. But given the rights fees involved—NBC paid the International Olympic Committee $1.18 billion for its stewardship of the London Games—at least some loss is almost unavoidable.
NBC Sports Group chairman Mark Lazarus allowed that the company is likely to lose money on this year’s Olympics, before adding that the financial picture is “much improved from the plan we inherited at the time of the [Comcast-NBCUniversal] merger.”
While NBC placed a very pricey wager on the next four Olympics, plunking down $4.38 billion on a package that extends from Sochi in 2014 through the as-yet unclaimed 2020 Summer Games, NBCU CEO Steve Burke said he believes the investment “has a high percentage chance of paying off.”
Burke added that the June 2011 flight that brought the NBC delegation to Lausanne, Switzerland, to bid on the Olympics was “a binary moment.” Thinking back, Burke said, “it would have been an awful thing to come home without the games.”
Miller Tabak analyst David Joyce expects NBC will lose between $100 million and $200 million on London, given revenue of $1.1 billion and an estimated $100 million in production costs.
NBC’s Beijing Games was the very definition of a blockbuster, averaging 27.7 million viewers over 17 nights of prime-time deliveries. And while media buyers expect London will generate equally robust ratings, it may take a bit more time to count the house. According to NBC Olympics svp, programming Peter Diamond, the Peacock will stream 3,500 hours of live coverage from London—or “every frame of every competition.”
Clearly, this is no longer Dick Ebersol’s Olympics. While the executive producer of the last eight NBC Olympics will be helping to guide the London narrative in an advisory capacity, Lazarus is calling all the shots. And it was Lazarus who decided to go all-in on digital streaming.
NBC’s digital offerings will be so robust that there may be times when as many as 40 events are streaming simultaneously. It’s a big step up from the tape-delay contortions the network has had to make in order to counteract the tyranny of time zones, and it also speaks to the premium pricing NBC can command for its converged packages. (Clients no longer have the option of making digital-only buys; instead, they’re required to commit to time in the linear TV broadcasts in order to get a chunk of the digital inventory.)
Viewers looking to stream the live events on NBCOlympics.com will be required to verify that they are cable or satellite-TV subscribers. In a bid to help fans navigate the process, NBC tapped Carson Daly to shoot a 90-second spot designed to walk them through the five-step verification procedure.
As for traditional prime-time ratings, Lazarus said the prospect of topping Beijing’s deliveries is “an unlikely scenario.” At the same time, NBCU president of research and development Alan Wurtzel said he believes the London games will stand among the top five TV events of all time. Wurtzel projects that as many as 200 million viewers will tune in over the course of the two-and-a-half-week spectacle.
NBC’s presentation of the 2012 London Olympics begins July 27. Prime-time coverage will adhere to the model established by Ebersol, with swimming, diving, gymnastics, track and field, and beach volleyball accounting for the lion’s share of the programming menu. NBC also will continue to frame the marquee events with prepackaged profiles of the athletes and their families, a strategy that helps establish narrative consistency and is particularly effective at engaging female viewers.