NBC Sports: Peacock's Next Nightmare
Now that NBC has smoothly figured out its late-night programming, media observers can chatter about another looming crisis for the Peacock Network: Dick Ebersol's next move.
Ebersol, the Yale-educated Connecticut native who has run NBC Sports since 1989, announced last week that the network expects to lose money on the upcoming Vancouver Winter Olympics, citing the bleak advertising climate last year and the burden of NBC's massive rights fee. It was a costly -- and likely galling -- admission of failure by Ebersol, whose tenure at NBC has been defined by Olympics coverage and who in 2003 convinced General Electric, which is currently in the process of selling NBC to Comcast, to spend about $2.2 billion for the rights to the 2010 Winter Games and the 2012 Summer Games in London. (The Vancouver Olympics were valued at roughly $820 million, or about 35 percent more than what NBC paid for the rights to the 2006 Winter Games in Turin, Italy.)
Over the last decade, Ebersol has trumpeted the appeal and profitability of the Olympics and criticized other networks for what he saw as irresponsible spending on sports-league TV contracts. In 2002, after NBC declined to match a combined ABC-ESPN bid for National Basketball Association TV rights, Ebersol claimed NBC's competitors had a "distorted" view of the business. "If winning the rights to a property brings with it hundreds of millions of dollars in losses, what have you won?" he said in a statement issued by NBC at the time. "When faced with the prospect of heavy financial losses, we have consistently walked away and have done so again."
Of course, NBC got back into the big-league sports game in 2005 when it agreed to a six-year, $3.6 billion deal to acquire the NFL's Sunday Night package, and "Football Night in America" is now the network's lone Top 10 prime-time program. And to be sure, the 2008 Beijing Summer Games were a massive financial and creative success for NBC, thanks in part to the stir created by Michael Phelps' record-breaking swimming performance.
Many broadcasting veterans -- both inside and outside 30 Rockefeller Center -- believe Ebersol's statement about potential red ink on Vancouver was a calculated ploy to manage the International Olympic Committee's expectations for the next set of TV deals, which the IOC had planned to finalize later this year.
In classic IOC style, there is no uniform bidding process when it comes to U.S. media rights for the Olympics. In the past, networks have bid on a single Summer Games, a pair of Winter Olympics, or more recently, a combo of Winter and Summer Olympics. NBC, which has high expectations for the London Games in 2012, has televised every Summer Games since 1988, and counting Vancouver, has broadcast the last three Winter Games.
The expectation among TV executives is that the IOC will package the 2014 and 2016 Olympics for bidding, particularly since Sochi, Russia, host of the 2014 Winter Games, is "not an attractive location," according to Neal Pilson, the former president of CBS Sports and a media consultant who was worked with the IOC. (NBC CEO Jeff Zucker told a few senior executives at lunch recently that he expects the Sochi Games to be a "disaster," according to people who attended the meal.)
But if the Vancouver Olympics won't be worth the price, then what, exactly, is Ebersol's plan for NBC Sports? His contract as chairman of NBC Universal Sports expires after the 2012 London Olympics. Going forward, it's not clear that Ebersol's new bosses at Comcast -- assuming the sale of NBC is approved by regulators -- will be as eager to indulge his zeal for the Olympics. GE, after all, could justify the Olympics as a massive promotional platform for its myriad other businesses, which include aviation, household appliances and medical devices. In the lead-up to the 2008 Summer Olympics, the Chinese government purchased $700 million worth of GE products, including wind turbines and security equipment for a new subway line in Beijing. Comcast, on the other hand, has virtually no international presence and is focused almost entirely on media and entertainment.
And while the silver-haired Ebersol, who turned 62 in July, has enjoyed a storied career at NBC, his track record over the last decade has been decidedly rockier. For several years until NBC re-acquired the NFL, the network had virtually no major-league U.S. sports on its airwaves, having ceded the NBA, Major League Baseball and college basketball to competitors. Ebersol has failed miserably on the Internet, as NBC Sports' online efforts have never gained much of a foothold -- even during the Olympics -- and NBCSports.com's traffic figures continue to lag well behind ESPN.com, FOXSports.com, and CBS Sportsline.
Ebersol has passed on opportunities to get involved with emerging sports such as soccer and mixed-martial arts, and perhaps most frustrating for sports fans, NBC is also the only broadcaster that continues to show major events on tape delay. The network raised hackles again in the summer when it delayed several important Wimbledon matches -- including the Andy Roddick-Andy Murray semifinal -- even though ESPN2 was televising matches live from the tournament. (NBC also declined to allow live streaming of the matches online.)
And while Vancouver is in the same time zone as Los Angeles, West Coast sports fans will once again have to make do with "plausibly live" coverage of next month's Winter Olympics: nearly all of the prime-time coverage will be shown on tape delay in the Pacific time zone. Apparently Ebersol and NBC believe we Left-Coast types actually like it that way, as NBC spokesman Chris McCloskey told the L.A. Times recently: "Our extensive research has clearly shown that West Coast viewers, more than any other region, wants to see the Olympics when they're available to watch, and that is when they are home, which in almost all cases means prime time."
There's been little public discussion about Ebersol's future or how Comcast will integrate NBC Sports with its own sports media holdings, which include Versus, the Golf Channel and several regional sports networks. Meanwhile, Ebersol's warning shot about Vancouver may already be working: the IOC recently announced that it is "seriously considering" delaying the media bidding war for the 2014 and 1016 Olympics until next year because of the uncertain advertising climate. Industry veterans expect ESPN, Fox and perhaps a combined CBS-Time Warner effort to compete against NBC for the Olympics, and many believe ESPN is more motivated than ever to win, particularly since it has already secured South American media rights for the Vancouver and London Games in 2012.
If ESPN wins the bid, it will likely shift a large chunk of prime-time coverage to ABC, its corporate cousin at Disney and the broadcast home of the Olympics during the '60s, '70s and early '80s. And that would be a particularly bittersweet loss for Ebersol: His first job in sports TV was as an Olympics researcher for -- you guessed it -- ABC Sports.