On the heels of the news that ticket sales for Rio 2016 are lagging relative to past Olympics, broadcast revenue is on track to hit record numbers. NBC brought home an estimated $1.3 billion in advertising revenue from the 2012 London Olympic Games and are confident that figure will be comfortably surpassed with the Rio Games.
In 2014, in a deal valued at $7.65 billion, plus an additional $100 million signing bonus, the International Olympic Committee (IOC) awarded NBCUniversal (NBCU) the broadcast rights in the USA for the Olympic Games through to 2032. Included in the agreement was free-to-air television, subscription television, internet and mobile.
Specific to the Rio Games themselves, NBCU is paying approximately $1.28 billion to broadcast the event, a figure which does not include production costs, so that’s what they’ll need to earn to a least break even.
In a press call last week, NBC Executive Vice President of Sales and Marketing, Seth Winter, said that the network “will break revenue records in Rio; there’s no doubt about that.”
Without revealing specific details, Winter indicated that big contracts in the ballpark of $25 million to $50 million range have been finalized in recent weeks, contributing to ad revenue estimate boosts.
With host Rio only being one hour ahead of the United States’ East Coast, far more events are able to be streamed live at prime time than in previous Olympics, sparking a potential 50% increase from digital ad sales compared to London 2012.