Gabbing about TV losses is a big deal. That’s because everyone would rather talk up profits. Increasingly, when it comes to some high-priced TV programming, talk isn’t cheap.
TV sports are still a big deal for major TV networks. It’s live. TV commercials can’t be fast-forwarded. Advertisers are happy. Networks are happy that advertisers are happy.
NBC says it will lose money on the London Olympics, according to Gary Zenkel, president of NBC Olympics and executive vice president of strategic partnerships for NBC Sports Group.
This will be the second Olympics in a row where it has seeped red ink. NBC lost money on the 2010 Vancouver Winter Olympics. Zenkel says the London games were part of earlier multi-Olympic deal that included the Vancouver Games.
But this won’t be the same going forward. He is pretty "confident" the network will make a profit with its upcoming Olympics -- a $4.4 billion deal for the 2014 through 2020 Olympic Games that the company secured last year.
It’s not just the Olympics that bleed funds. Other sports TV franchises that lose money can still be a must-have. DirecTV reportedly still doesn’t make money from its “NFL Sunday Ticket” package, where viewers can see out of market
That costs the satellite programmer over $1 billion a year. But it’s the NFL – the pre-eminent yearly sports TV franchise that not many TV networks can do without because the NFL attracts hard-to-get male and young male viewers in large quantities.
Going forward what happens when even more TV networks risk life-and-limb -- and possible profits -- for sports TV? It depends. Surely NBC would will tell you the big summer Olympics events promote a lot of TV programming for the upcoming fall schedule, where viewers will at least sample shows.
Is that enough? Local TV affiliates might say so. They also gain handsomely from being able to sell local TV inventory in the NFL, the Super Bowl and the Olympics.
The danger in this regard comes from NBC increasingly shifting a lot of its big sports content to digital platforms. For the London Olympics NBC will show every single event live – a huge chunk of it on online platforms.
Now, to be fair, much of this won’t garner any substantial viewership to worry local TV stations. Some 95% or more of viewers still like to watch TV the old fashion way -- on a big TV screen setting on a soft, comfy couch.
Good news: the same is true for most sports and that can be comforting to TV networks -- at least for the near term.