Nbc Takes Its Turn With Olympics Network Dishes Out $1.27 Billion For Sydney And Salt Lake Games

It was Monday, so it was time for another TV megadeal.

NBC launched its preemptive competitive strike by buying the rights to two Olympics, the 2000 Summer Games in Sydney, Australia, and 2002 Winter Games in Salt Lake City, for a stunning $1.27 billion.

NBC will pay the International Olympic Committee $715 million for the rights to Sydney, $259 million more than it paid for the 1996 Olympics from Atlanta.

The fee for Salt Lake City will be $555 million, $180 million more than CBS will pay for the 1998 Winter Olympics from Nagano, Japan.

The NBC/Olympics deal follows last week’s frenzy of TV activity in which Disney bought Capital Cities/ABC, Westinghouse bought CBS, and ITT/Dow Jones purchased potential New York superstation WNYC.

At the news conference to announce the deal, NBC president Bob Wright joked that it was “our turn” in the spin cycle of TV deals. While it lacks the magnitude of Disney’s $19 billion purchase, the Olympics deal will have a sizable impact.

It reinforces NBC’s status in its battle with ABC for the No. 1 network spot. It is a major hit on the competition, from ABC and Fox to CBS and Turner.

Industry analysts Monday were already speculating that NBC can’t make money on the deals, and that the schizoid nature of the advertising marketplace makes buying megaevents five and seven years down the road quite a risk.

So be it, said NBC Sports president Dick Ebersol.

“Part of the risk and joy of TV sports is the guessing game,” he said. “Many people in 1989 said we’d be behind the eight ball by tripling the NBA (rights fee). It’s all part of the fun, part of the game.”

Disney entered the game last week. Bob Wright, the president of NBC, said ABC alone is a competitive threat to any programming acquisition, but the Disney factor didn’t drive this decision.”Sports is not merchandising or selling mugs and jackets,” Wright said in a slight poke at Disney. “It is a key component of our network profile. Our objective is to make NBC as strong as possible, and offer broad, appealing programming. Olympic programming is already understood and anticipated by people.”

It was too good an offer for the IOC to pass up.

“We had not anticipated a preemptive offer of this magnitude and scope,” said IOC vice president Dick Pound, who handles TV rights negotiations. “It is a unique situation, the first time the IOC has agreed to a package agreement for successive games.”

No commendations came from rival networks. There were no official comments from other CEOs, but the general impression among spokesmen was that the IOC and NBC started the game before anyone else was allowed to play.

“They were disappointed, and expressed reluctant admiration that NBC was willing to step out on a limb,” Pound said.

Sydney Olympic officials were anticipating a rights fee about the same as that for Atlanta, considering Atlanta is a “home” Olympics and the time difference will make Sydney a tape-delayed Olympics in the U.S. The $715 million will take care of 30 percent of Sydney’s operating budget.

Salt Lake City officials were hoping for a $400 million-plus figure. The $555 million rights fee will take care of a third of Salt Lake’s operating budget.