According to a report last week in Television Broadcast, the International Olympic Committee (IOC) expects to get more than $2 billion for the U.S. television broadcast rights for the 2014 Winter Olympics in Sochi, Russia, and the 2016 Summer Olympics in Rio de Janeiro, Brazil. NBC paid nearly $0.9 billion for the 2009 Summer Olympics in Beijing, China, and according to the network’s annual report, lost $150 million in the deal. (NBC continues to broadcast programming from those events on their Universal Sports channel, however, so the books aren’t entirely closed yet on the earnings for that content.)
If $2 billion sounds like a lot of money, you’re right, even if it is spread over two sporting events with worldwide scope. It’s still surpassed by the contracts for the broadcast of NFL football games. According to Sports Business Daily, the average annual licensing fees for the NFL telecasts total more than $3.7 billion annually.
Now, keep in mind that this is just the fee to set up shop. It does not include the equipment, sets, production and support staff, on-air talent, marketing, and a myriad of other expensive details. And these billions of dollars have to be made back in advertising revenues and subscriber fees. And we can reasonably expect to see at least some of the 2016 Games in 3D. Keep that in mind when you dream about new models for content distribution that are free to the consumer without advertising. Someone’s got to pay these billions of dollars a year if we want to see football or the Olympics on our high-definition screens.