Published November 20, 2014
ESPN, Fox and the other main contenders for U.S. television rights have shown interest in buying a package covering four Olympics rather than the usual two-games deal, the IOC's chief negotiator told The Associated Press.
The International Olympic Committee had been planning to auction only the lucrative rights to the 2014 Winter Olympics in Sochi, Russia, and the 2016 Summer Games in Rio de Janeiro.
But Richard Carrion, the IOC executive board member who handles U.S. broadcast deals, said the committee was now weighing the possibility of widening the high-stakes bidding to include the 2018 Winter and 2020 Summer Games. The host cities for those games have not been selected.
Carrion said all the likely contenders — NBC, ESPN and Fox, along with a potential bid from CBS and Turner — have approached the IOC about the four-games option. Adding two more Olympics to the package could bring the total rights fee to more than $4 billion.
ESPN and Fox have been among the most adamant for a four-games deal, another Olympic official told the AP. The official spoke on condition of anonymity because details of the negotiations have not been made public.
Carrion said he would support the idea, which is expected to be discussed at IOC executive board meetings in Lausanne, Switzerland, next week.
"We realize this is a major decision going forward for any of these guys," Carrion said in a telephone interview. "We want to make sure that they come with their best and highest (bids). I would certainly support it if they want to go to four games, and do all the way to 2020."
ESPN declined comment on its interest in bidding for four games, however, spokesman Josh Krulewitz said: "We are interested in Olympic rights and plan an aggressive bid that makes good business sense for ESPN." Fox declined comment.
The IOC has postponed the U.S. rights negotiations for more than a year because of unfavorable economic conditions and a slump in the advertising market. Carrion said the IOC was now preparing to go ahead with the auction in the first half of the year.
"It seems like this is something that should happen probably in the second quarter of the year," he said. "We're seeing a lot more optimism than we've seen in a while. The economy in the U.S. seems to be giving off positive signs. It certainly behooves us to start getting ready."
TV rights fees provide the bulk of the IOC's revenue, with the U.S. share accounting for more than half the total. About half the money goes to host cities, with the rest split among the IOC, international federations and national Olympic committees.
Carrion said the major players have all expressed interest in securing the rights to at least the Sochi and Rio de Janeiro Games. The IOC was also waiting to see if a "nontraditional bidder" entered the fray. Carrion cited the case of Time Warner, which made an initial approach with CBS for the rights to the 2010 and 2012 Olympics, but dropped out before final bidding.
In that auction, in 2003, NBC and parent company General Electric outbid ESPN and Fox for the 2010 and 2012 rights — a deal worth $2.2 billion. NBC paid $2 billion in direct rights fees and GE signed on as a global sponsor.
If the IOC decides to sell the rights through 2020 and has the auction in the next six months, the networks will be bidding on two Olympics without knowing where they will be held.
The 2018 host will be chosen by the IOC in July from among three candidates — Annecy, France; Munich; and Pyeongchang, South Korea. The 2020 bidding process opens later this year, with the host city vote in 2013. Bids are expected from South Africa, Italy and possibly Japan, Spain and the Middle East.
Canadian IOC member Dick Pound, the committee's former negotiator of US TV rights, said the four-games package made financial sense to the networks as a long-term investment.
"With 2014 and '16 being in higher-risk places, it might be better for the networks to be able to make the investment and hope to recoup it," Pound said, noting the 2018 Games will be in Europe or South Korea and the 2020 Olympics could be in Rome. "There's no reason it shouldn't happen if the deal is sensible and it's adequately backed financially."
Multi-games deals have been made before.
In 1995, NBC obtained the rights to five Olympics from 2000 to 2008 in a pair of deals worth $3.5 billion. Those negotiations took place in secret, without other networks getting a chance.
The current competitors must be prepared to offer sealed bids worth billions of dollars in an uncertain financial climate. NBC reported losses of $223 million on last year's Winter Games in Vancouver, British Columbia.
Carrion expects a higher fee for the 2014 and 2016 Olympics than the previous $2 billion.
"Without a doubt," he said. "We think it's a fantastic event. Much more than a product, it's something that the whole world looks forward to. It's a unique event. We want to make sure we maximize the value of the rights, which we think are considerable."
Pound, who is no longer involved in the rights deals, said the IOC must judge whether the networks have sufficient long-term backing from their parent companies.
"Do they have financial heft to stay out there for eight years and honor hundreds of millions of dollars of promises?" Pound said. "It certainly would be very risky for the IOC to have a broadcast partner go belly up."
The IOC is preparing to move forward even with NBC in the midst of a takeover by cable TV giant Comcast Corp. The deal, which has been under regulatory review, is expected to be approved by the Federal Communications Commission and Justice Department early this year. Comcast would obtain a controlling stake in NBC Universal from GE.
Comcast hasn't made its Olympic intentions clear.
"They will certainly have their say, being the majority owner," Carrion said. "It's a big, big decision for them, absolutely."
Carrion said the auction would be "very similar" to the previous round, when the networks submitted sealed bids at IOC headquarters in Lausanne.
AP Sports Writer Rachel Cohen in New York contributed to this report.