NBC Affiliates Get Ready to Share Olympic Rights Costs

Delighted that Comcast spent liberally enough to acquire rights to the 2014-2020 Olympics, NBC station group executives will now be called on to share in those costs in some fashion. How that will work is still to be determined, though at least a preliminary plan could be sketched out within weeks, said Brian Lawlor, who heads the NBC affiliates board.

One reason is a financial structure may still need to be put in place for the London Summer Games next summer, which could set an affiliate-contribution template for the next decade.

The concept is not new. NBC affiliates have contributed cash to help offset sports rights costs for the Olympics before and there are inventory swaps for "Sunday Night Football," where the network may get access to more desirable time. 

"I think there's some understanding that there will be some sort of participation with the affiliates," said Lawlor, whose day job is heading the E.W. Scripps station group.



There is a new wrinkle, however, that might complicate expense-sharing over the next decade: the retransmission revolution. Stations are now collecting carriage fees from cable, satellite and telco TV operators and networks are taking a portion.

That begs the question whether contributions for the Olympics -- where NBCUniversal will pay $4.4 billion -- will come from that pie or be in addition to the network's retrans cut.

Michael Fiorile, former chair of the NBC affiliates board who leads the Dispatch Broadcast Group, has been working with NBCU on a plan that would allow the network to use its leverage to negotiate the retrans deals on behalf of the stations.

In theory, Fiorile said, stations offering the Olympics "should generate more retrans revenue" helping NBCU negotiatiors.

Still, with the Olympics helping NBCU collect higher carriage fees for its stable of cable networks, the level of affiliate contributions could be moderated significantly, especially as Comcast made a commitment to bolster station groups, while garnering their help in the FCC approval process for gaining control of NBCU.

The initiative where NBCU would negotiate retransmission consent deals for affiliates would be on an opt-in basis. Many station executives have expressed optimism. One skeptic, however, is Bob Prather, COO of the Gray Television group, who said the pan sounds positive in theory, but "I think it will be very hard to make it work in practice."

Fiorile, who was part of a group that extracted promises from Comcast during the FCC process, said Comcast continuing with the Olympics falls in line with what it expressed then. Olympic rights came up in talks and while Fiorile indicated Comcast it wasn't planning on spending irresponsibly to keep the Games, it understood their value.

"They're just doing exactly what they said they would do," he said.

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