Will Comcast Tighten Ebersol's Purse Strings?

Dick Ebersol may be hamstrung in his latest bid to land the media rights to the 2014 and 2016 Olympics, as his new boss at NBC Universal suggested he’s ready to put an end to the Peacock’s free-spending ways.Speaking to investors during Comcast’s fourth-quarter earnings call Wednesday, NBCU CEO Steve Burke declined to confirm whether the broadcast unit would throw down the requisite billions to ensure its reign as the home to the Winter and Summer Games. “We’re here to make money, and we’re going to be disciplined,” Burke said, when asked about bolstering NBC’s sports properties. “We’re going to concentrate on businesses that have good returns.” While it’s a tremendous promotional platform and an undeniable feather in NBC Sports’ cap, the Olympics may be too rich for Comcast’s blood. Despite putting up robust ratings, NBC lost $223 million on the 2010 Winter Games in Vancouver––the first time an Ebersol-produced Olympics has failed to generate a profit––and the fiscally sober cable giant may be disinclined to invest in the Sochi and Rio package.All told, the 2010/2012 package cost $2.2 billion: $1.18 billion for the London games, $820 million for Vancouver and $200 million that GE invested in a global Olympic sponsorship.Complicating matters for Ebersol are rival nets ESPN and Fox, both of which also plan to make a run at the 2014/2016 rights bundle. Naturally, the more bids there are on the table, the greater the cost of securing the Games. Already partners on the NCAA March Madness tournament, CBS and Turner Sports are expected to put in a joint bid. The International Olympic Committee said it expects to have a deal in hand by July.Meanwhile, back in New York, Burke pointed out that the NBCU cable channels, which include top-ranked USA Network as well as Bravo, Syfy and MSNBC, are the engine of growth at the programming unit, responsible for 80 percent of all profits. He added that it could take as many as four or five years to turn things around at NBC, which he characterized as “a real weakness.”“One of the advantages of waiting 13 or 14 months to get a deal closed ... is you get a chance to really get to know the assets, really get to know the people,” Burke said, adding that in the run-up to landing regulatory approval for the Comcast-NBCU deal, his team was able to “create a set of goals and plans and priorities for the future.” Comcast last month assumed a 51 percent stake in NBCU, paying GE $6.2 billion in cash.In the same call, Comcast chairman and CEO Brian Roberts dismissed speculation that the newly-minted media titan would look to unseat the outlet that boasts a virtual monopoly over the TV sports landscape. “People talk about ESPN and other things, [but] I don’t really see that as a realistic thing,” Roberts said, adding that the programmer will instead concentrate on exploring synergies between the various NBC Sports assets and Comcast cable channels Versus and Golf Channel. “I think we have a long-term opportunity to do some big things with these brands.”The nation’s largest cable operator reported net income of $1.02 billion, or 36 cents per share, for the final three months of 2010, up from $955 million, or 33 cents, a year ago. Revenue grew 7 percent to $9.72 billion.

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Will Comcast Tighten Ebersol's Purse Strings?

Anthony Crupi

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Anthony Crupi