Chicago Could Be a Lucrative Olympics Choice

By RICHARD SANDOMIR

Chicago’s bid to host the 2016 Summer Olympics would probably bring in more money from a United States TV network — and more from corporate sponsors — than Rio de Janeiro, Tokyo or Madrid, industry executives say. The International Olympic Committee will pick a city Friday in Copenhagen, setting the stage for the negotiations that will provide the bulk of its television revenue. A Chicago win is expected to generate a three-way bidding war between NBC Universal, ESPN and Fox.

The prospect of a domestic Olympics is so tantalizing that Rupert Murdoch, the chairman of News Corporation, said last month that his Fox network would enter the 2014-16 Olympic TV bidding only if Chicago won.

Yet, in recognizing that Chicago would raise the price tag, he added, “I don’t want to call anybody a liar, but no one’s ever made any money out of it” — contradicting NBC’s claims of past profits. Murdoch might have been teasing a rival and tweaking the I.O.C., which scorned and ignored his bid for the 2000 Sydney Summer Games.

Barry Frank, executive vice president of IMG Sports Media and a veteran Olympic rights negotiator, estimates that Chicago would generate a 10 percent higher network rights fee than Rio. “Advertisers are sympathetic to a U.S. event,” Frank said from Malta. “It offers great proximity for sponsor hospitality and it would get the kind of coverage that will get on newspapers and on TV because it’s so immediate.”

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IOC awards Brazilian broadcast rights for $210m

By Stephen Wilson, AP Sports Writer

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LONDON — The IOC awarded the broadcast rights in Brazil for the 2014 and 2016 Olympics to three media companies in a deal worth $210 million, a major increase over previous contracts and a boost for Rio de Janeiro’s bid for the 2016 Games.

TV Globo acquired the main rights across all platforms in partnership with Bandeirantes and Rede Record in what was described as a historic deal for Brazil, South America and the International Olympic Committee.

“This is an important announcement, not only for the IOC but for the Olympic movement as a whole,” IOC president Jacques Rogge said in a statement. “Brazilians will be able to enjoy unparalleled coverage of the Olympic Games in 2014 and 2016. The agreement also represents an important increase in revenue for the Olympic movement.”

The 2014 Winter Olympics will be held in Sochi, Russia. The host city of the 2016 Summer Games will be chosen by the IOC on Oct. 2, with Rio de Janeiro competing against Chicago, Madrid and Tokyo.

The Rio bid committee said the agreement covers $170 million in rights fees and at least $40 million in media promotional packages.

The total fee marks a big increase over the $60 million deal with Rede Record for the 2010 Winter Games in Vancouver and 2012 Summer Olympics in London. The South American rights, including for Brazil, for the 2006 and 2008 Olympics went for $29.75 million.

The Rio bid committee hailed Thursday’s announcement as evidence of the strength of the Brazilian economy and advertising market.

“This was a very positive day for Rio indeed,” bid chief executive Carlos Roberto Osorio told The Associated Press in a telephone interview. “During the economic downturn, Brazil was the only country that could put together a proposal this strong. It shows the economy is very stable.”

The announcement came just over a month before the IOC vote in Copenhagen. Rio is considered a strong contender with its pitch to take the Olympics to South America for the first time.

The most lucrative broadcast rights are those awarded in the United States. The IOC has postponed those negotiations until sometime after the 2016 vote due to the economic crisis.

Rio 2016 president Carlos Nuzman called Thursday’s deal a “new benchmark” for Olympic rights.

“It demonstrates the strength of the Brazilian market today as well as our interest, passion and commitment to the Olympic games,” Nuzman said in a statement. “This historic deal is certainly a tremendous boost to the Rio 2016 bid.”

Under the contract, TV Globo has rights to free television on a non-exclusive basis in partnership with Bandeirantes, along with exclusive pay TV, Internet and mobile phone rights. Rede Record acquired other non-exclusive free TV rights.

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USOC in race against time to shore up Chicago 2016

LAURA WALDEN & KEIR RADNEDGE / Sports Features Communications

TAMPA/LONDON, Aug 17: Suddenly, it appears, directors of the United States Olympic Committee have realised the awful truth . . . that they will be handed all the blame if Chicago is beaten in the 2016 Games bid race.

That would then raise serious questions about both long-term and short-term strategy within the USOC.

The long-term issue concerns the US share of Games revenues while short-term concerns will focus on the unnecessarily premature proposals to launch an Olympic television network.

Both are provocative issues among IOC members and other national Olympic committees which may consider the only way to protest will be to vote for Madrid, Rio de Janeiro or Tokyo rather than Chicago on October 2 in Copenhagen.

Advocates of the USOC’s ‘super-share’ of Olympics revenue claim this is deserved reward for bringing in the major TV revenues, from NBC, and a number of significant sponsors. Opponents say the US status as the wealthiest nation on earth means it should accept parity for the sake, if nothing else, of ‘fairplay.’

The TV network plan is confusion itself. NBC owns not only US rights to action from the Games but rights to many high profile events that are Olympic. What would be left for the USOC network because NBC would, no doubt, contest the USOC’s right to challenge it on its own high-cost territory.

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USOC delays launch of its TV network

New venture was seen as detrimental to Chicago’s Olympic bid

IOC President Jacques Rogue presents USOC Chairman Larry Probst with an invitation to the 21st Winter Olympic Games (February 2009)

BERLIN – The United States Olympic Committee has managed to defuse another dispute with the International Olympic Committee, one that threatened to blow up on Chicago’s 2016 Summer Olympic bid.

After its chairman, Larry Probst, met here Saturday morning with IOC President Jacques Rogge, the USOC announced Sunday it will hold off indefinitely on the planned 2010 launch of the U.S. Olympic Network, its television venture.

By conceding to the IOC’s demand that it delay implementation of the network until a variety of issues can be resolved, Probst has allowed the Chicago bid to stop being on the defensive as it was forced to explain the USOC’s actions to the voters who will choose the 2016 host Oct. 2.

Speaking with a handful of U.S. reporters in Berlin as the statement was being released Sunday, Probst said, “The USOC wants to do everything it can to help support the Chicago bid. If this meeting with President Rogge and the decision we have made is going to be beneficial to the bid, I think that is terrific.”

Chicago 2016 chairman Patrick Ryan applauded the action in a composed public statement while undoubtedly doing verbal cartwheels in private.

Probst also may have aided the bid by admitting the USOC mishandled the July 8 announcement of its network plans, which came one day after the IOC had sent the USOC a strongly-worded cease-and-desist letter.

“In hindsight, it probably could have been handled more effectively and more thoughtfully,” Probst said. “But as a result of conversations I’ve had with President Rogge, I think we’re on a good track.”

Probst also admitted the USOC “underestimated the intensity of the (negative) reaction we got from multiple constituencies.”

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Opinions about USOC TV Network

FROM PHILIP HERSH’S BLOG

Watching Universal Sports’ live stream of the World Swimming Championships, with picture quality that is clearer than ever, also makes it clearer than ever that the U.S. Olympic Committee should have thrown in with NBC-owned Universal rather than create its own U.S. Olympic Network (referred to hereafter as USON).  Not only did the USOC get on the wrong side of the International Olympic Committee on the network issue, it likely will spend at least $25 million a year — with no return in the near future, if ever — on the USON.  That could quickly wipe out the $100 million cash surplus with which the USOC began the 2009-2012 period and be even more telling after 2012, when USOC revenues are expected to be substantially lower than the current quadrennium.

I asked USON major domo Norm Bellingham, the USOC’s chief operating officer, for comment about the financial risk involved (and five other questions), and he politely declined comment on any of them in an effort to “work quietly and effectively with our Olympic partners.”  That clearly referred to problems with the IOC, which had blasted the USOC for going forward with the network announcement after being told to hold off.  “Since the announcement of our network, there have been several conversations and exchanges of information between the USOC and the IOC,” Bellingham told me in an email sent the day before I left on holiday.  “Both sides have expressed a determination to reach a solution that is in the best interests of the Olympic movement in the United States and worldwide.”

More belated fence-mending attempts:  The USOC leadership gave the National Governing Bodies no advance warning on the network announcement, but acting CEO Stephanie Streeter sent those national sports federations an invitation a day later to be part of an “NGB Advisory Council” to “assist the USOC in launching the network.”  Wrote Streeter in an email to “NGB Leaders,” a copy of which was sent to me: “Specifically, I view the NGB Advisory Council as a means to receive your ideas about the programming we can air; to discuss possible on-the-air talent; and to hear your thoughts about sponsorship issues and other commercial arrangements.  I recognize that several NGBS have existing relationships with other media companies and we want to work together to answer any questions that may arise about these and any other issues.”

The sentence I underlined is the key one:  all the big sports (track, swimming, gymnastics, figure skating), have such relationships, and they would be crazy to give up exposure on the likes of NBC and Universal Sports to be part of the USON.  If need be, those federations would stop calling their Olympic selection meets “Olympic trials” (figure skating does that already) to avoid having to cede control over them to the USOC.

One of the major points former USOC chairman Peter Ueberroth stressed in the press conference announcing the USON was how it would provide exposure for sports that get little.  But Gordy Sheer, the marketing director of USA Luge, which for years has been a management model for small sports federations, does not buy Ueberroth’s argument.

“Personally, the network never really made sense to me from Day One,” Olympic silver medalist Sheer (left, front) told me in an email.  “I have always been a supporter of the USOC buying time on existing networks on a consistent basis rather than building a network of Olympic programming.  Buying large blocks of time on an existing network (like NBC) would give the athletes more exposure and, if done properly, a new revenue stream for the USOC.  The financial rewards might not be as high, but we’d get a lot more eyeballs, and the risk would be considerably less.”

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Numbers game: IOC would be taxed without NBC revenues

By Philip Hersh – Tribune Reporter

Want to know why the International Olympic Committee is backing NBC in its dispute with the U.S. Olympic Committee over the U.S. Olympic Network?

It is pretty clear from the numbers in the IOC’s 2008 tax filing.

Tripp Mickle of Sports Business Journal first posted information about the filing Tuesday. His story emphasized the IOC’s $383.3 million profit on a record $2.4 billion revenue for the fiscal year that ended Dec. 31, 2008, noting it was 68 percent greater than the $228.6 million profit from the previous Summer Olympic year, 2004.

The revenue figure that struck me was $1.73 billion in global TV rights for the Beijing Olympics.

What the filing wasn’t required to say is NBC paid $894 million of that — a little more than half the total.

So the IOC reacted quickly when NBC told top international Olympic officials it was upset that the USOC had shunned a partnership deal with NBC-owned Universal Sports and announced last week it was creating its own network in partnership with cable operator Comcast.

I detailed the IOC’s point of view in both Blogs and stories last week.  Its reaction included a strongly-worded statement criticizing the USOC’s action after the IOC had sent it a cease-and-desist letter, asking the USOC to delay the announcement until some contractual and rights issues could be resolved.

IOC executive board member Richard Carrion of Puerto Rico blasted the USOC what he characterized as an arrogant, unilateral approach to the situation.  NBC sports chairman Dick Ebersol told me the Chicago 2016 Olympic bid would be badly damaged unless the IOC and USOC worked out a solution to its latest imbroglio.

Top USOC officials, including former chairman Peter Ueberroth and current chairman Larry Probst, have yet to respond to the points raised by Ebersol.

But there is an underlying irony in all this, expressed in the cold math of the IOC tax filing.

The IOC and the USOC have been embroiled for three years in a heated dispute over the USOC share of both IOC global sponsorship rights and U.S. television rights, a share established in a 21-year-old deal between the parties that was renegotiated 13 years ago.  The current deal gives the USOC 12.75 percent of U.S. broadcast rights.

The IOC has argued the U.S. percentage should be diminished because the U.S. share of TV and global sponsorship revenues has diminished.  Ueberroth has steadfastly maintained the USOC should not accept less because the U.S. still is the major contributor to those revenues.

The IOC’s tax filing proves that, at least in the case of television, Ueberroth is dead right.

If NBC, whose rights fee for 2008 was more than twice that paid by any other broadcaster, had paid the same amount for Beijing as the next-highest rights holder, (the European Broadcast Union consortium’s $443 million for both the 2006 Winter Games and 2008 Summer Games), the IOC’s 2008 tax return would have looked a lot different.

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How Olympic TV Might Kill Chicago’s 2016 Bid

By Sean Gregory

On October 2, members of the International Olympic Committee (IOC) will meet in Copenhagen to decide the host city for the 2016 Summer Olympics. Officials from Chicago, which is competing against Rio de Janeiro, Madrid, and Tokyo for the Olympic prize, are working feverishly to perfect their pitch down the homestretch. The Chicago delegation just returned from Africa, where it made a presentation to the Olympic executives of that continent. President Obama himself sent a video message, asking the Africans for their vote.

Chicago’s bid has received positive feedback, and many consider the Windy City the favorite to win the Games. So why, less than three months before the vote, is the Olympic governing body of the United States ticking off the very officials that will decide Chicago’s fate, in a move that could cost an American city the Games?

The U.S. Olympic Committee (USOC), on July 8, announced that it had signed an agreement with Comcast to form the U.S. Olympic Network, which will provide year-round coverage of Olympic sports. According to the USOC, the network would launch sometime after the 2010 Vancouver Games. One problem: such a network could compete with NBC, which is paying $2.2 billion to broadcast the 2010 and 2012 Olympics. The network accounts for roughly half of the IOC’s global broadcast rights fees, and NBC will surely be among the bidders for the 2014 and 2016 Olympics as well. Plus, NBC wanted the USOC to partner with its own cable network, Universal Sports, for Olympic programming. NBC is irked, and the IOC doesn’t like to see its sugar daddy sulking.

So the IOC publicly chided U.S. Olympic officials. “We were aware that the USOC had been considering a new ‘Olympic broadcast network,’ but we have never been presented with a plan, and we had assumed that we would have an opportunity to discuss unresolved questions together before the project moved forward,” the IOC said in a statement. “It is for this reason that the IOC is disappointed that the USOC acted unilaterally and, in our view, in haste by announcing their plans before we had a chance to consider the ramifications.” The IOC also said that the network “raises complex legal and contractual issues and could have a negative impact with other Olympic broadcasters and partners, including our U.S. TV partner, NBC.”(See TIME’s photos of the Olympic highs and lows in Beijing)

Ouch. This wrist-slap comes at the worst possible time for Chicago. The IOC and USOC were already squabbling about the USOC’s share of sponsorship and broadcast revenues: the IOC wants to reduce the funds flowing to the U.S., while the Americans are resisting. Both sides, however, had agreed to put those negotiations aside until after the 2016 decision was finalized. Now, all tensions are back on the table.

The IOC is a famously isolated, self-important organization whose members do not like to be slighted. Competition for hosting rights is fierce: a city needs a majority of the 107 members to vote in its favor to win. One ballot can tip the balance, and this dust-up could alter a member’s decision. “This is an absolutely unnecessary self-inflicted wound,” says Marc Ganis, a Chicago-based sports business consultant who has closely followed the 2016 bid. “It just serves to remind the IOC of their preconceived notion that the Americans are arrogant and self-serving.”

Indeed, the USOC’s strategy is mystifying. A Chicago win would be a financial boon to the USOC. Given the buzz around an Olympics in the States, greater levels of broadcast and sponsorship revenue would trickle down to the USOC and the governing bodies of the Olympic sports. The USOC needs this money, as it has lost valuable sponsors like Home Depot, General Motors, and Bank of America since the onset of the recession. So why not work with the IOC to resolve any issues with the network — or at least hold off on action until Oct. 2?

Norm Bellingham, chief operating officer for the USOC, insists that the IOC was informed of the network’s plans for months. “We never heard any negative feedback from them,” says Bellingham. “By the time we heard that they prefer that we hold off, we just did not feel like that was viable.”

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Hurdles to Clear for US Olympic Network

(ATR) The USOC and IOC appear to be searching for a way to defuse a dispute over the launch an Olympic channel in the U.S., a channel the IOC worries could pose a threat to the value of TV rights for the Olympic Games.

Wednesday the USOC announced that it would partner with U.S. cable giant Comcast to launch the U.S. Olympic Network next year. The channel would operate 24/7, its programming consisting of competitions involving the Olympic sports and other events but not the Games themselves. Games-time coverage is reserved for the U.S. broadcast rights-holder, which is determined by the IOC.

The USOC drew the ire of the IOC when it went ahead with the announcement. The IOC says there are issues to be resolved while the USOC says it does not need IOC permission to move ahead.

A day later, USOC and IOC issued carefully-worded statements that indicate a willingness to address IOC concerns about the new channel.

“The IOC is seeking additional information on USOC’s plans and remain hopeful that we can work through the issues and reach a solution that works for all the many partners involved and for the American public in particular,” says the IOC statement.

The USOC also pledges cooperation – and says it has kept the IOC informed.

“We agree with the IOC on the importance of working together to reach a positive solution that works for all the parties involved and hope to do so as soon as possible,” says the USOC statement.

“We have had and will continue to have numerous conversations with the IOC leadership,” the statement concludes.

But the IOC says it has not been fully informed on plans for the USON.

“We were aware that the USOC had been considering a new ‘Olympic broadcast network’, but we have never been presented with a plan, and we had assumed that we would have an opportunity to discuss unresolved questions together before the project moved forward. It is for this reason that the IOC is disappointed that USOC acted unilaterally and, in our view, in haste by announcing their plans before we had had a chance to consider together the ramifications,” says the IOC release.

“The proposed channel raises complex legal and contractual issues and could have a negative impact our relationships with other Olympic broadcasters and sponsors, including our U. S. TV partner, NBC,” warns the IOC.

There is no word on when meetings might be scheduled to resolve the differences between the IOC and USOC, but an official with the USOC says plans are being made for talks.

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IOC Members Endorse Network, Dismiss Chicago Concerns

Two European IOC members are rallying around the idea of the U.S. Olympic Network.

Gerhard Heiberg, chair of the IOC Marketing Commission, tells Around the Rings the new network can be a plus for the U.S.

“They have been talking about this for a long time and finally they launch it. I hope and think it will be a positive thing for the U.S. It will draw a lot of attention to the Olympic Games and Olympic sports.”

Heiberg says he does not believe the Olympic TV channel could spell trouble for the Chicago 2016 bid: “I don’t think it will have an impact on the voting of IOC members [Oct. 2]. If it should, it might even be positive … it [the Olympic Network] means the U.S. is putting more emphasis on Olympic sports.”

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USOC words, actions, attitude do Chicago Olympic bid no favors

Since the April day in 2007 the U.S. Olympic Committee announced it had selected Chicago over Los Angeles as the U.S. candidate for the 2016 Summer Olympics, the USOC has done Chicago few favors.

In fact, USOC words and actions over the last year have possibly undermined Chicago’s bid and made a mockery of the USOC mantra of an “unprecedented partnership” between the national Olympic committee and a bid city.

It began last October, when Peter Ueberroth, in his final public speech as USOC chairman, rebuked the arguments of International Olympic Committee members critical of the USOC’s stance in a revenue sharing dispute with the IOC. Ueberroth also reminded everyone in no uncertain that the U.S. corporations still contribute more than 60%of IOC revenues.

Chicago 2016 had no advance warning of what Ueberroth would say, which was certain to offend some 2016 voters, no matter if  his points were valid.

Nor did Chicago 2016 have any clue the USOC was going to announce Wednesday the launch of its new television network, in partnership with Comcast, despite having received an IOC warning Tuesday not to move forward until a number of rights and marketing issues were resolved.

USOC Chief Operating Officer Norm Bellingham, his organization’s point man on the TV network, told me in a Wednesday telephone interview that Chicago 2016 was not involved in discussions about the U.S. Olympic Network, set to launch in 2010.

In the news release announcing the network deal between Comcast and the USOC, which carried the logos of both partners, there is a line that makes cryptic expression of what I have learned was Comcast’s concern over going public without IOC approval: ”The transaction is subject to closing conditions.”

It also was telling that no Comcast executive took part in the media conference call announcing the deal.

A Comcast spokesperson declined comment.

One of the IOC’s most powerful members, Richard Carrion of Puerto Rico, blasted the USOC, telling me in a Wednesday phone interview, “They [the USOC] just do what they want to do, and the Olympic movement be damned.”

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(Continuing Story) TV rights squabble may hurt Chicago’s bid

IOC upset with USOC over plans to launch an Olympics TV network

By Philip Hersh and Kathy Bergen | Tribune reporters

Just as Chicago tries to ride out one storm buffeting its bid to host the 2016 Olympic Games, it could face another problem: possible backlash from a money-related dispute between the U.S. Olympic Committee and the International Olympic Committee.

“I don’t see how this can help,” IOC Executive Board member Richard Carrion of Puerto Rico said via telephone Wednesday.

This week, Chicago’s 2016 Olympic boosters unveiled a plan to meet with residents of all 50 wards in an effort to rebuild support in the wake of a controversy sparked last month when Mayor Richard Daley said he would sign a host-city agreement placing full financial responsibility for any losses on the city.

Now, Chicago’s bid faces another potential hurdle because of actions not of its making.
The IOC is upset that the USOC, which would reap huge financial benefits from a Chicago Summer Games, went ahead Wednesday with an announcement about its Olympic television network launch with Comcast, despite the IOC’s advice to wait until contractual issues were resolved.

The dispute boils down to what impact the U.S. Olympic Network will have on IOC cash cow NBC, the network of the Olympics in the United States through 2012, and to a long-standing question about marketing rights and use of Olympic marks that 1978 federal legislation granted the USOC.

In an interview with the Tribune after the IOC’s position first was reported by The New York Times, USOC Chief Operating Officer Norm Bellingham said Chicago 2016 was not involved in discussions about the Olympic network.

“If this damages the [Chicago] bid, it would be deeply unfortunate, and it is in no way our intention,” Bellingham said. “We are not trying necessarily to advance the Chicago bid, but we believe we are trying to advance the Olympic movement in the U.S. territory.”

The move is likely to have more direct bearing on the relationship between the USOC and the IOC than on the bid, according to Olympics historian Kevin Wamsley of the University of Western Ontario.

But he also thinks if powerful IOC members are angry enough, it could result in behind-the-scenes lobbying against Chicago.

“I’m sure Chicago is horrified,” he said. “I would be.”

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