What will FOX pay to broadcast the Olympics?
Posted by ZA on May 5, 2010
Variety reports that Fox is planning to make a “major run” at securing the rights to broadcast the 2014 Olympics (Sochi) and 2016 Olympics (Rio). Fox would need to knock off incumbent broadcast partner, NBC, in order to land the Olympics. NBC has been the television partner for the Olympics since 2000, but have said they lost money to broadcast the most recently Vancouver Olympics. Fox is rumored to have bid much less than NBC (half is the reported number) for broadcast rights to ’08 & ’10 Olympics.
So how much will Fox bid on rights to the ’14 & ’16 Olympics? My guess is they bid somewhere in the $750 million range for each, which is well below the current broadcast rights on Olympics. NBC will lay out close to $2 billion dollars for the rights to broadcast the ’10 Olympics and 2012 London Olympics (chart of broadcast rights paid on Olympics). So the natural questions are why would Fox bid an amount lower than what it costs today? And does Fox stand a chance to win the broadcast rights for the Olympics?
I think Fox bids $750 million (-ish) for each of Sochi & Rio because that’s what they think they are worth. No network in their right mind should think that Sochi & Rio are going to have the revenue potential as London (2012) and Beijing (2008). So Fox’s bid will be closer to what NBC paid in Athens ($793 million) and Sydney (Sydney $705 million) earlier this decade. And it’s possible that Fox (and others) bid even lower on the 2014 Olympics, because Winter Games do not sell as well in the United States and Sochi isn’t a name destination.
I think Fox will have a shot, but probably loses out to NBC or ABC/ESPN. NBC has made the Olympics their thing, so I think it’s worth it to them to bid more just so they can continue to be the “Olympic Network”. ESPN is a sports media juggernaut 365 days a year, so they would have the potential to market the Olympics in a way we’ve never seen. It just seems those two networks should want the Olympic broadcast rights more, so I think ultimately Fox’s bid will fall short.