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Nagano with the Wind
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February 19, 1998: 7:22 p.m. ET
For CBS, which paid $375M for the Olympics, these games are a washout
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NEW YORK - For left-handed Czech hockey goalie Dominik Hasek, the 38 saved shots against Team USA Wednesday at the Nagano Olympics spelled sweet victory for his underdog squad. But not for CBS.
At CBS -- which shelled out a record $375 million in broadcasting rights for the 1998 winter Olympics -- the quick exit of the American squad went straight to the solar plexus of its advertising revenues.
With unusual bluntness, CBS executives quoted in various press accounts are openly bemoaning the scourge of low ratings, waning enthusiasm for obscure events, and dead-on-arrival promotions for athletes who seem here today...and Nagano tomorrow.
Through the first 12 days of the games, the average ratings for this year's Olympic Games were 16.4 -- meaning 16.4 percent of households monitored by Nielsen Media Research tuned in. That is significantly short of the 19.6 rating, or 30 percent share of the market, that CBS had initially promised gung-ho advertisers, who coughed up as much as $475,000 for a 30-second slot, the Wall Street Journal pointed out Thursday.
The numbers also place CBS's Olympic performance in drawing viewers 37 percent behind the last Winter Games in Lillehammer, and 15 percent behind those in Albertville in 1992.
The ratings have been so poor that CBS has started offering sponsors free advertising time during the games, a practice known as "makegoods." In some cases the advertising time that CBS has been forced to give away was earmarked to promote other CBS programs.
Merrill Lynch analyst Jessica Reif Cohen said the network's decision to offer the make goods now, rather than later on in the year, will keep the financial hit from extending into the next quarter. (202K WAV) or (202K AIFF).
CBS had been banking on Team USA to prop up sagging ratings. With its unceremonious ouster Wednesday, the network, analysts say, is left with a single marquee event -- the figure-skating face-off between Americans Michelle Kwan and Tara Lipinski -- to practically carry the broadcasting day.
Adding to the ratings woes, observers say, are 14-hour time differences that don't gel with many Americans' waking hours. Many events are taped and shown later, which can detract from the you-are-there immediacy of Olympic viewing.
Furthermore, another hoped-for Olympic pull, "extreme" sports, are proving extremely frustrating to CBS advertisers. The events, some say, lack the daredevil thrills and spills that the name connotes -- and since they're often taped anyway, any disaster on snow (another lurid Olympic draw) is yesterday's news.
But as bad as the ratings appear to be for CBS, Reif said the number of people who are tuning into the network is still about three times as high as a normal night. (205K WAV) or (205K AIFF).
CBS (CBS) officials have tried to put a positive face on the advertising-dollar doldrums. While ratings may be down this year, they say, and the $60 million in expected profits suddenly seem a will-o'-the-wisp, the network will still command the highest market share among its rivals for the two weeks of the games. The broadcasts have reportedly also helped boost ratings in the local news markets of CBS affiliates carrying the games.
"Look, 170 million Americans have watched the Olympics at some point," Dana McClintock, director of Olympic communications for CBS, told London's Financial Times newspaper. "You couldn't expect a repeat of Lillehammer. That was magical, lightning in a bottle."
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CBS Corp.
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