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NBC Universal rings in Athens profits
Network reaps ratings and revenues across the board, with smallest viewer increases at USA Network
August 30, 2004: 5:48 PM EDT
By Krysten Crawford, CNN/Money staff writer

NEW YORK (CNN/Money) - In hindsight, NBC Universal's big bet on the Athens Olympics isn't looking so risky after all.

As recently as last month, executives at General Electric, the parent of NBC Universal, were predicting $20 million in profits from the summer games. By the time the Aug. 13 opening ceremonies rolled around, those estimates had been revised upward to around $50 million. Today, after flooding and nearly monopolizing U.S. airwaves for more than two weeks, company reps are crowing about profits of roughly $70 million.

For a company that earned $15 billion in 2003, the 2004 Olympics windfall amounts to a drop in the proverbial bucket.

The big payoff may come later. For the Athens Games, NBC Universal saw a broad, at times dramatic ratings surge across its five primary networks: the main NBC broadcast channel, as well as MSNBC, CNBC, and its newly-acquired USA Network and Bravo cable platforms. NBC is hoping this bonanza of new viewers remains loyal in the long run.

Because broadcast viewership exceeded ratings that NBC Universal had promised advertisers, the network was able to sell at the last minute commercial time slots that had been set aside. They had been set aside in case of a repeat of the Sydney Games, when disappointing viewer numbers forced the company to make good on its ratings pledges by giving advertisers free additional air time.

For the 2004 Olympics, NBC Universal sold more than $1 billion in ads, having paid a whopping $793 million for the exclusive right to broadcast the Athens competition.

The company has agreed to pay an additional $4.2 billion for the U.S. media rights to the four summer and winter games that take place through 2012. NBC has broadcast every Olympics since 1988, and it lost money only on the Barcelona games.

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The Athens games were a test for NBC Universal, too. Olympics coverage was available 24 hours a day on any one of seven NBC Universal networks. More than 1,200 hours of sports were broadcast, nearly triple the coverage of Sydney in 2000 and more than the past five summer games combined.

Media industry observers praised NBC Universal for a winning sales performance at a time when rival networks like Fox Broadcasting and ABC are struggling to make their respective broadcast rights to pro baseball and football pay for them.

"I think (NBC Universal's strategy) was brilliant," said Brad Adgate, senior vice president of corporate research at Horizon Media, a New York branding firm. He also pointed to data showing that, rather than cannibalize NBC, the expanded Olympics coverage lured viewers from cable to NBC. "This was one way how media consolidation has really helped. The Olympics gave NBC a boost and gave viewers a chance to watch sporting events not typically covered."

Will viewers stick around?

The bigger story is whether the games' high viewer numbers will produce a "halo effect" at NBC Universal's various networks and, if so, how long it might last. That tale will play out in the next few weeks.

In the short run, the saturation appears to have paid off for NBC Universal. Some 203 million U.S. viewers tuned in at some point during the 17-day event, lured by the incredible highs and abject lows experienced by some marquee athletes. Athens now ranks as the most widely watched summer games to take place outside the U.S.

According to Nielsen Research Media data released through NBC Universal, the Athens telecast averaged a 15 rating on NBC, up 9 percent over Sydney.

NBC Universal has been somewhat stingy about releasing Nielsen data for its cable platforms. The network said that USA, MSNBC, CNBC and Bravo collectively drew 69 million viewers, up 60 percent from a comparable period in July.

The company has also claimed that total viewers as of early last week were up 14 percent at USA, 186 percent at MSNBC, 191 percent at Bravo and 1,333 percent at CNBC compared to pre-Olympic levels.

A company spokeswoman said Monday that those numbers were based on times during which the Olympics were broadcast on each network compared with the same times at some point before the games began. So for example, a comparison would examine one hour of Olympics events broadcast on Bravo versus the same hour of non-Olympics programming on Bravo at an earlier time.

In an effort to measure the "halo effect" of the Olympics on NBC Universal's cable networks, CNN/Money collected Nielsen data showing that overall ratings were up at MSNBC, CNBC and Bravo from the start of the Olympics on Friday, Aug. 13, through last Wednesday, Aug. 25, compared to the same period in July.

Total viewership, for instance, was up 40 percent, 47 percent and 167 percent at Bravo, MSNBC and CNBC, respectively.

USA misses broad lift

Ratings at USA, however, were down slightly. In the first 13 days of the Athens Games, total viewership decreased 5 percent compared to the previous-month period (July 16 through July 28).


Jack Myers, a media research analyst and publisher of the Jack Myers Report, said the big increases at MSNBC and CNBC were no surprise, given the relatively small starting base at each network. Given that both are news networks, Myers doesn't expect the lift to last long.

As for USA's decline, Myers noted that the top-ranked network started with a larger audience, which made increased ratings harder to achieve. Still, Myers speculated that NBC Universal officials were less than thrilled with the lackluster numbers.

"(USA) has been the No. 1 or 2 cable network for a while and (raising ratings further) is a challenge to begin with," said Myers. "Nonetheless, I'm sure it's a disappointment for NBC Universal."

Cameron Blanchard, senior communications director of NBC Sports and Olympics, said she had not reviewed the full ratings data yet and could not comment.

NBC Universal plans to release more detailed cable ratings numbers Thursday.  Top of page

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