Comcast Corp.’s NBCUniversal unit claimed a major victory Wednesday as it locked up the U.S. media rights for Olympics through 2032 with a relatively minor fee increase.
NBCUniversal, which already owns the U.S. media rights to the Olympics through 2020, will pay an average of $1.275 billion for each Games from 2022-2032, 16% more than the average fee of $1.1 billion it committed for the 2014-2020 Games.
The payments are guaranteed, regardless of the location or NBC’s profits, and will not be adjusted for inflation. The arrangement essentially means that the deal gets cheaper for NBC as time passes.
NBC, which also agreed to make a $100 million on-signing payment to the International Olympic Committee, has earned record ratings for the Olympic telecasts in recent years.
With nearly 220 million unique viewers, the London Games in 2012 were the most-watched multiday television event in U.S. history.
There is a white-hot market for major sports rights in the U.S. these days. Nearly every major league or sports association has announced new, long-term media rights agreements that roughly double their current fees.
Still, no auction was held. The two parties hammered out the deal in a series of meetings that began in November, continued during the Sochi Olympics.
“For us to have a complete set of rights from now to 2032 will help us and put us in the position not only to change with the media ecosystem but to be part of that change and lead that change,” said Mark Lazarus, chairman of NBC Sports.
NBC has televised every Olympics since 2000, and every Summer Games since 1988. IOC President Thomas Bach said NBC’s expertise had garnered a unique trust among IOC leaders.
“You can make one dollar more but you can risk having your product being destroyed,” Bach said.
The deal shocked sports media analysts, who have grown used to the unprecedented rights agreements of recent years.
Neal Pilson, a former president of CBS sports who has consulted with the IOC on rights negotiations, said it represented an insurance policy against economic downturns or political unrest that could threaten the Games. He said he expected a higher increases “would be necessary to keep property away from other bidding parties.” However, since NBC outbid the other U.S. networks by about $1 billion in the most recent auction, it is possible the IOC feared an absence of a competitive market and made the best deal it thought it could.
For NBC, the deal locks in annual costs at about $600 million a year, plus production, and will help the company secure long-term distribution agreements for its numerous cable channels, many of which feature Olympic programming.
“We’ve made money in each of the last two Olympics and we believe we will be able to do that again,” said Brian Roberts, Comcast’s chairman and CEO.