Olympics

Since their first telecast in 1960, the Olympic Games have enjoyed a mutually beneficial relationship with television. TV has popularized the event to the point that the global audience is now estimated at one billion viewers. Over the years, however, American television networks have become mired in a high-stakes bidding war for broadcast rights. The stiff competition has kept rights fees inordinately expensive and, as a result, America contributes much more money than any other country to support the Olympics. In 1996, the Summer games in Atlanta were priced at $456 million, a figure that did not include the cost of the production itself, which has been estimated at another $150 million. All of the Western European nations combined paid $250 million in fees for the same games.

It can also be argued that network coverage of the games has expanded to the point of excess in the attempts to recoup spiraling costs by selling more commercial time. Nevertheless, the ratings, advertising revenue, and prestige associated with broadcasting the games have established the Olympic rights as among the most coveted and expensive in all of television.

Simultaneously, the International Olympics Committee (IOC) has become increasingly dependent on income derived from American television. Even the scheduling of the games has been changed, in part, to accommodate the U.S. media. In 1994, the IOC adopted a two-year staggered schedule; the Winter Olympics in Lillehammer were followed by the 1996 Summer games in Atlanta. This eased the strain on corporations who were beginning to find the price of quality Olympic advertising prohibitive. At hundreds of thousands of dollars for a thirty-second spot, or hundreds of millions for a sponsorship package, neither the Committee nor the networks could afford to lose these clients. Spacing the Summer and Winter Olympics two years apart thus allowed sponsors to spread out their costs and also to invest in more high-profile packages. The revised schedule also granted the IOC more time to effectively allocate the revenue.

The conditions now surrounding the televised contests derive from increased attention to the Olympics that began in the late 1960s. The games first attracted a significant television audience during the 1968 Summer games when Roone Arledge was at the helm of ABC Sports. The combination of his in-depth, personalized approach to sports broadcasting (embodied by ABC's Wide World of Sports) and the technological advances in the field, such as satellite feeds and videotape, set the standard for Olympic telecasts. Utilizing inventive graphics and personal profiles of the athletes, Arledge slated forty-four hours of coverage, three times as many hours as the previous Summer games. He packaged a dramatic, exciting miniseries for the television audience and successive producers have continued to expand on his model.

The 1972 Summer Olympics in Munich, West Germany showed further growth in costs and coverage. However, the drama of the games was overshadowed by the grisly murder of eleven Israeli athletes at the hands of Palestinian terrorists. Viewers watched in horror as the events of the 5th and 6th September massacre unfolded, and television turned into an international forum for the extremist politics of the Black September Organization. This event provided the single worst tragedy in the history of sports broadcasting.

The Olympics have also given television sports some of its most glorious moments and endearing heroes. Few will ever forget the U.S. hockey team's thrilling victory over the Soviets in 1980, Nadia Comenici's perfect performances, or the dedication and perseverence of athletes like Mark Spitz, Carl Lewis and Dan Janssen. Typically, the top American athletes become media celebrities, winning lucrative endorsement and commercial deals along with their medals.

Aside from catapulting the athletes to media stardom, the Olympic games are a ratings boon for their host network. Customarily, that network captures 50% of the television audience each night for the two-and-a-half weeks of the Olympic telecast. Furthermore, this habitual pattern establishes a relationship between the viewers and the network which translates into increased ratings for regularly scheduled programming. This springboard into the new season, along with the hefty sums commanded by Olympic advertising time are the reasons that the broadcast rights are so sought after and so expensive.

Possibly, however, the situation has gotten out of control. For example, the Squaw Valley games in 1960 cost CBS only $50,000 in rights fees. Twenty years later, NBC bid an astonishing $87 million for the 1980 summer games in Moscow. This price was almost four times the fee for the previous summer rights. Unfortunately for NBC, the U.S. boycott of the games destroyed hopes of a windfall and sabotaged the scheduled 150 hours of planned coverage. Still, rights fees have continued to climb. The Summer broadcast rights almost tripled from 1980 to 1984 ($87 million to $225 million) and both Winter and Summer rights have gone for $300 million or more since 1988.

Traditionally, networks lose money on the Olympics. Bids are made knowing that the result will be millions of dollars lost. The games have become such an emotionally charged part of a network's inventory, however, that profit is no longer the chief concern. Broadcasting the Olympics, much like broadcasting professional sports, is more about network prestige than about making sound business decisions.

These exploding costs have sent networks looking for alternative strategies to ease the financial burden. In 1992, NBC made an ill-fated attempt at utilizing pay-per-view subscriptions. The "Olympic Triplecast" was organized in conjunction with Cablevision and intended to sell packages of commercial-free, extensive programming. The plan was a failure, mainly due to viewers' reluctance to pay to see some events when network coverage of others was free of charge.

CBS has had more success in reducing their outlay by joining forces with TNT (Turner Network Television). The Winter Olympics of 1992 began the collaboration between the two networks which gave TNT 50 hours of programming in exchange for $50 million towards rights fees. The arrangement was so successful that it was renewed in 1994 for the Lillehammer games. The sharing of broadcast duties and costs seems to hold a promising future for both the quality and cost of Olympic coverage.

-Jennifer Moreland