IOC Snubs Higher Chicago US TV Rights So We Start Learning Portuguese

Philip M. Stone October 66, 2009 Follow on Twitter

This column has often said that above all the Olympic movement is big business – a multi-billion dollar business – but the International Olympic Committee (IOC) has shown that money is not everything by throwing Chicago out in the first round of voting for the 2016 Olympic Games – a decision that could well cost it more than $100 million, and perhaps a lot more, in lower US TV rights for the “Samba” Games.

IOC Finance Commission Chairman Richard Carrion told the AP in Copenhagen that not having the Games in Chicago will probably cost the IOC some US TV rights money. “Obviously, the domestic Games would be more valuable,” he said.

And an indication of how worried the IOC could be over those TV rights is that Carrion says it could well be that the deal won’t be done until 2012, while under normal circumstances it would have been completed some six months ago.

So, why the delay? Because the IOC wants the US TV networks to be in the best financial shape possible when they make their multi-billion dollar bids and right now the US networks are still hurting badly from the advertising downturn. The hope, therefore, is to give the networks another couple of years if necessary for everything to get back to normal and then the bids will come in far higher. But what if everything in the TV business doesn’t get back to normal? Then the IOC is going to see a considerable shortfall in the funds it hoped Rio would still bring in.

There are all sorts of conspiracy theories on why Chicago was thrown out in the first round of voting last week, but it is fascinating to take a look at some of the media coverage before and after that vote.

The IOC has said that popular support in a host city and that crime was under control were two important aspects of any bid and the negative media coverage from Chicago on both of those topics smothered the domestic and international media.  In particular there was a gang fight in a school with a horrific murder not to mention other murders during the week, and on the popularity side the Chicago Tribune ran a final poll showing the city just about divided on whether it really wanted the Games.

NBC, the US network with the current Olympic rights through 2012, to its credit reported the Chicago killing on its Nightly News with Brian Williams, but there wasn’t one word in the narrative about Chicago being in the running to host the Games. And then you have Drudge, read widely outside of America, too, that seemed to go out of its way in the week before the vote to show Chicago at its negative best. Drudge ran big headlines such as “Olympic Spirit: Video Shows Brutal Gang Murder In Chicago”,  “White House Condemns Chicago Student Beating”, Anti-2016 Protesters Set Decorations On Fire In Downtown Chicago”, “Fox-TV Ordered Not To Run Anti-Olympics Story”,  and then when it was all over Drudge gleefully headlined,  “The Ego Has Landed: World Rejects Obama: Chicago Out In First Round.”

But for all of that, the scenario was supposed to be that it was too close to call between Chicago and Rio.  ABC Anchor Charles Gibson, for instance, was in Chicago, probably having in mind leading his evening newscast with the celebrations in Daley Plaza. Didn’t quite turn out that way.

So, why did Chicago lose? Mayor Richard Daley knows exactly why. The media in Rio was solidly behind their city’s big, but the Chicago press was not, he said. Steve Chapman in The Tribune wrote, “Oh, please. Both the Tribune and the Sun-Times endorsed the bid in their editorial pages. The local TV stations, in the coverage I saw, were positively boosterish. A few churlish pundits like myself disagreed. But I’d be surprised if anyone at the IOC cares what we think.” And on that point he is probably right. Losing probably had a lot more to do with the US Olympic Committee’s relationship with the IOC (touchy at best these days) than anything else.

And then there was CNN’s US network’s live Copenhagen coverage. Biased? Well, here’s what we heard from the anchor after the IOC so unexpectedly voted Chicago out. Incredulous voice: “Chicago is OUT? Chicago is OUT? Madrid is still IN? Tokyo is still IN? Wait a Minute! Chicago Is OUT?” It’s times like this it’s a good thing CNN domestic and CNN International go their separate ways!

With the party going strong into the night on the Copacabana Beach it was obvious the Rio Games will become known as the “Carnival Games”, and it was in that atmosphere that CNNI anchor Richard Quest asked Portuguese-born CNNI sports anchor and reporter Pedro Pinto whether thought he would be able to get through the newsroom competition of all those wanting to go to Rio to be on CNN’s 2016 reporting team. Pinto was waiting for that one, telling Quest he speaks fluent Portuguese and he figured that should buy him a ticket. A few minutes later Quest asked Irish-born anchor Fionnuala Sweeney whether she wanted to go and whether she spoke Portuguese. Without missing a beat she answered, “I’m going to learn”.

So, it seems the world is looking forward to Rio, but the truth is that by voting as it did the IOC TV revenues could take a big hit. Rio is just one hour ahead of Eastern time, so it shouldn’t be too hard to schedule big events in US prime time, but production costs would have been far less for Chicago than they will be for Rio (think of all the meetings people will fly to and day trips are out -- it takes 9 ½ hours to fly New York-Rio whereas it’s about two hours New York-Chicago). But if Rio can really take on the rhythm as the Samba Games, then, who knows, people may tune in as never before.

US TV rights usually account for 50% or more of the IOC’s television revenues.

Disney’s ESPN and CBS had let it be known they would be bidding for the 2016 Games but was that only if Chicago won or will they bid for Rio, too?  NBC paid $894 million for the Beijing Games and is paying $2.2 billion for the 2010 Vancouver Winter Games and the 2012 London Summer Games. But that winning bid came at a far different time when NBC was doing financially very nicely. Now the networks are financially hurting will they recover enough by 2012 to surpass NBC’s 2010 and 2012 winning bid?

The IOC makes no secret of wanting the highest TV revenues it can get.  For some 50 years it negotiated European TV rights with the European Broadcasting Union (EBU), but this time around it figures it can get far more via negotiations with individual countries, and Rupert Murdoch, wanting to boost his satellite channels, is upping the ante. He has already secured rights in Turkey and Italy a move that so upset Italian state broadcaster RAI that it talked about closing down its sports channel and that it and other public broadcasters would cut back on their coverage of secondary Olympic sports.

Spanish state broadcaster RTVE recently  won national broadcasting rights for the 2014 winter and 2016 summer Games in a deal said to be worth around €70 million ($100 million) and German broadcasters ARD and ZDF have reportedly submitted a joint bid of around €90 million, with Murdoch’s Sky Deutschland said to have bid around €100 million. The IOC itself is handling separate negotiations with Germany, France and the UK and has given the rights for other European countries to Lagadere’s Sportfive agency on financial terms not released.

The global Vancouver and London TV rights are thought to have been sold for around $4 billion – Finance chairman Carrion said in Copenhagen it “probably will come in north of $3.8 billion.” That compares to about $2.57 billion for the Beijing (2008) and Turin (2006) Games.

As we said, the Olympics are big business, but if the US TV networks don’t see a full recovery by 2012, and with Rio chosen over Chicago, then maybe the Olympics won’t be quite as big a US TV business as it once was.