How broadcasters will be affected by 2020 Olympics postponement
With a postponement of the 2020 Summer Olympics in Tokyo, how will broadcasters be affected?
The International Olympic Committee typically sells the broadcast rights to one or more company or organization in various countries and regions of the world.
These deals typically allows these networks to broadcast coverage of the opening and closing ceremonies as well as the events themselves.
Other networks and journalists can typically be on site at the games, but are restricted from using footage from events until after it airs on the broadcast partner in the respective country or region.
The IOC also heavily defends the use of the “Olympics” name and logo, meaning these other broadcasters typically have to avoid using that word, but, just like with the name “Super Bowl,” often come up with alternatives.
In the U.S., the longtime broadcast partner has been NBC — which has held summer rights since 1988 and winter ones since 2002.
In 2011, NBC and IOC agreed to a $4.38 billon deal to carry both the summer and winter games through 2020. In 2014, the deal was extended through 2032 — with another $7.75 billion at play.
NBC’s deal with the IOC is one of the most expensive TV sports rights deal in the world and the IOC reportedly gets most of its revenue from its deal with the network.
In turn, NBC (and most other commercial broadcasters around the world) attempt to make a profit by over the licensing costs paid by selling commercials during coverage and, in recent years, associated digital offerings.
With billions of dollars at stake, NBC acknowledged earlier this year that it has insurance to cover a cancellation of the Olympics, though it’s not clear how that would work with a postponement.
To produce the Olympics, NBC typically sends in a large crew to the host country and also ships custom built studio sets to the host city or country, setting up shop in the International Broadcast Center, a facility that each host country builds for the international media’s use.
Other shipments also include the necessary gear to produce quality coverage — ranging from cameras and audio equipment to other needs such as furniture, lighting and more.
Meanwhile, additional operations are set up back in the United States to support coverage of the games across NBC and NBCUniversal owned networks that carry coverage of the events.
Broadcasters typically start planning years in advance of each Olympics — so it’s likely that most details were already in place as the coronavirus epidemic started sweeping the globe.
Given the advance planning that goes into coverage, pushing back the 2020 Olympics to 2021 could also have a ripple effect of challenges with coverage of the 2022 Winter Olympics, currently planned for February 2022 in China.
Of course, it may be possible to simply “move back” existing plans by however many weeks or months the delay ends up being for.
However, this would likely cause a myriad of logistical complications ranging from talent and crew scheduling, accommodations and shipments of equipment and sets.
The summer Olympics, like Tokyo was scheduled to be, typically come at a time when TV ratings tend to slow down in the U.S. — since it’s at the tail end of summer and many of the “first string” of TV shows are on hiatus and would normally be airing reruns.
Recently, however, many networks have taken on the strategy of programming summer months with new shows that typically revolve around reality and game show fare.
During the Olympics, NBC typically eliminates its entire primetime schedule in favor of nonstop Olympics coverage.
Increased viewership around the Summer Olympics also lets NBC promote its fall lineup and helps NBC affiliates boost ratings on their late newscasts.
With the Olympics shifting, NBC and other broadcasters will need to consider a backup plan for what they will air in those big patches of primetime in July and August — as well as the potential affect on its fall schedule and local affiliates’ ratings.
The change of dates will also affect marketing teams at companies that sponsor the local Olympics teams or planned campaigns around the summer time period.
Again, these companies could simply move their promotions to whenever the games end up airing.
It’s also possible that broadcasters could be affected by the negative effects the pandemic causes on the global economy if advertisers have to pull out for financial reasons.
Even if broadcasters have fairly solid advertising contracts in place that allow the advertisements to be moved to whenever the games actually air, there’s always the chance some companies may not have the cash on hand to pay for the ads.
Broadcasters could decide to accept reduced advertising fees in hopes of keeping revenue up, but ultimately if a company is hit hard by the coronavirus outbreak, it may not even be able to pay those costs.