Is NBC Trying to Scare ESPN and News Corp. Out of the Olympics?

NBC sports head Dick Ebersol admitted recently that NBC is set to lose money on its coverage of the Winter Olympics in Vancouver next month, the first time it will do so under Ebersol’s watch.  After paying $820 million to televise the two-week event, GE chairman Jeffrey Immelt told investors at a recent conference that the company could lose “a couple hundred million bucks” on the winter affair.

After paying $613 million to broadcast the last Winter Olympics in Torino, Italy, NBC significantly increased the fee it paid for the 2010 Games in an effort to thwart other bids from competing entities, such as Disney, which can broadcast on ABC and numerous ESPN platforms, and News Corp., which would use its Fox stations.

While the fees to broadcast the Olympic Games in the United States have exploded over the past two decades, the ability to host the Games on television continues to be a significant draw for broadcasters.  Many media watchers expect ESPN to make a legitimate bid for the 2014 and 2016 Olympic Games, after already securing the rights to other big-time events, such as college football’s BCS games from 2011-2014 and the 2010 World Cup in South Africa.

The 2014 Winter Games in Sochi, Russia and the 2016 Summer Games from Rio de Janeiro (the first ever in South America) are expected to bring in a tremendous amount of money for the IOC, especially considering that NBC, Disney and News Corp. are all expected to bid.  The 2012 Summer Games in London, England are the last Games that are currently contracted to be televised and it could be the last for NBC.

However, one has to wonder if the NBC announcement that it will lose money on the upcoming Games in Vancouver is actually an attempt to make Disney and News Corp. second guess whether to actually bid for the 2014 and 2016 Games.  While the Olympics are very dependent on good story lines and strong competition to entice viewers, NBC has struggled to effectively keep viewers interested because so many events have been tape-delayed due to the time differences between the U.S. and recent host countries.  However, with Vancouver, the U.S. audience should be well served.

Sochi could be difficult for the U.S. audience, but Rio should be easy for broadcasters, which could help increase the bid.  Nevertheless, live events are a must in this day and age, as most people are willing to check the internet for results instead of waiting six to ten hours to watch a taped account during prime time.  Despite its cable properties, NBC and News Corp. will have to admit that they won’t be able to show as much as ESPN could.

My guess?  ESPN will televise the 2014 and 2016 Olympic Games.