NBC’s $250m Vancouver Loss – and What It Could Have Learned from History

Maybe it’s because I’m still pretty bitter about how the Conan thing went down and unnecessarily picking on NBC, but I want someone to erect a giant ticker on Rockefeller Plaza that showcases exactly how much the Peacock has lost on its investment in February’s Winter Olympics. According to a few sources, NBC is already in the red somewhere between 200 and 250 million dollars to cover the games that they secured the rights to nearly a decade ago for somewhere around $820 million. That scoreboard could get a workout if I had my way.

It’s easy to blame the network for blowing this one, but it had a pretty sound theory that the advertising dollars were supposed to help meet that investment. Seven years ago, NBC certainly didn’t anticipate (a) being the fourth place network, (b) the scattering of audiences across myriad cable and Internet channels and (c) the decreasing, perceived valued of television advertising. As valid as those reasons are, NBC still can’t pin everything on the media and economic climate. There was plenty of evidence – even back four years ago – that something would need to change when NBC set up shop for the Vancouver affair that will kick off on February 12.

It would take an exec with severe selective memory to forget the ratings beat down from 2006, and it was so bad four years ago that NBC had to watch Fox pick up the Gold and Silver medals in the ratings competition for both weeks it was airing Olympic programming thanks to fresh episodes of American Idol. NBC got shunted from the medal stand as Desperate Housewives and CSI each helped its other competitors to a Bronze.

The numbers look even worse when drawn next to the previous ratings stars in Salt Lake City and Nagano. The Salt Lake games were double the audience of 2006, and Torino’s ratings came in 25 percent below the last overseas Winter games in 1998. In 2002, NBC’s coverage of Salt Lake owned the top seven spots on both weeks, and even the time-delayed Nagano games carried the highest weekly ratings against its competition.

Regardless of how much spin Dick Ebersol and his NBC Sports team put on the numbers, it was comparatively a disaster to previous years. There are a handful of reasons that it happened. Partially, it was the other networks actually scheduling against the Olympics with new programming. The biggest, and maybe least discussed four years ago, was how NBC was shifting events that were happening live during the early afternoon Stateside to primetime, and for really the first time, the Internet spawned a new 24-hour online sports media that was able to beat them to the “news” aspect of those broadcasts. By the time broadcasts kicked off, we already knew how Bode Miller choked big time and that Lindsey Jacobellis’s showboating would cost her Gold. Information passed easily – and that was when Facebook was limited to campuses, YouTube was merely an infant that Google hadn’t bought out yet, and Twitter was not yet in existence.

Ebersol may hope that people have blocked out the downturn in 2006 thanks to the Olympic success in 2008 – but that credit should go to Michael Phelps and Michael Phelps’s Abs. The Summer Olympics have negligible competition when lined up near the February TV landscape, and there was also some really convenient scheduling: swimming events held in the morning in Beijing were live in American primetime, and brand name celebrities were plentiful through Phelps, the stars of the Men’s Basketball team, and even non-American studs like Usain Bolt. Ebersol hit the jackpot. Now? He’s resting his laurels on Apollo Anton Ohno, who’s about as hip as a Roots beret, and a red-headed snowboarder who is more a poster child for extreme sports than Olympic gravitas.

CBS and Fox are not going to be doing NBC any favors with scheduling; the niche market of Winter sports may just not have the draw any more with so much more to choose from on both broadcast and cable, but it also looks like the medal rounds are not going to be broadcast live on the network. It isn’t easy to track down, but buried within the confusing schedules, it looks like NBC will be tape delaying events happening live in the Pacific Time Zone to primetime. Since no one on Twitter will be talking about those results (sarcasm), it sounds like a safe gamble.

What may really be the downfall is the lack of a live digital video strategy here – something which you better believe ABC/ESPN has prepared for the next major international sporting event, the World Cup this June. NBC tinkered with Microsoft’s Silverlight technology in 2008 to do some Webcasting (disc. MSFT is a client of my employer), but the lack of compatibility prevents that tool from coming close to what ABC can do with ESPN360 or even CBS’s March Madness on Demand. An even bigger problem: the rights, likely because of the lack of foresight when signed, do not seem to include permissions for NBC to leverage any Olympic broadcasts on Hulu, a place that would give NBC long-term, prime media opportunities for buyers.

Ignoring the media landscape shift that was decently clear four years ago takes some jersey-barrier-thick heads, so let the finger pointing begin. It better end with the suits who thought everything was just fine when the flame was put out on a cold Italian night in 2006.

Dave Levy spends most of his day working on Edelman’s Digital Public Affairs team in Washington, DC. A media researcher on the side and a self-proclaimed geek, he blogs often about how traditional media adapts – or tries to adapt – to the growing social media world at State of the Fourth Estate. Follow Dave on Twitter here.

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