A Canceled Summer Olympics Is TV's Worst-Case Scenario

A key piece of traditional TV ad spending in late July-early August is on the line -- the $1.25 billion that Comcast’s NBCUniversal has pulled in so far for the 2020 Tokyo Olympics this summer.

For now, Comcast is optimistic the Olympics will take place. However, Japan will be making a final decision at the end of May.

What if the games don’t happen, or perhaps becomes a much narrower event at another location, such as Europe?

Reports suggest the coronavirus -- which perhaps will not rapidly escalate in the summer -- will still be an issue, especially where millions of at-site Olympic fans/consumers in Japan will gather.

Can one imagine a major sports TV event without sports watchers in arenas, stadiums and venues in Japan? Imagine just athletes who have been carefully screened competing in a controlled environment. That could happen.

Right now, some business event promoters are canceling or shifting conference efforts -- at-site locations are being transformed to virtual, internet-only live events.



Think of this extending to sports as well -- in the near term. Some are thinking about European soccer games being played in upcoming days without any fans in the stands.

At a recent Morgan Stanley Technology, Media and Telecom conference in San Francisco, Brian Roberts, chairman-CEO of Comcast Corp., said the company’s NBCUniversal big sports competition -- July 24-Aug. 9 -- is currently on schedule. “What I know is it’s full-steam ahead... “I’m optimistic the Olympics are going to happen. I’m looking forward to being there,” he said.

Though Japan is not as affected as China, it still has a major number of coronavirus infections versus Europe and North America. That has meant Comcast’s Universal Studios theme park in Osaka, Japan, has had to close for at least two weeks.

Roberts is more optimistic. A Beijing, China, theme park has begun construction again, after building was halted for several weeks. 

Back to the Olympics -- and perhaps the next level of concerning media business news. What happens to the $1.25 billion in TV ad deals already committed to NBCUniversal should the Olympics be delayed -- or canceled? 

While some of that money could get shifted to other NBCU platforms, one can imagine marketers will also want cash back quickly, then use that money to help fuel summer consumer promotion campaigns. Will a May decision in Japan be enough time to make changes?

Jeff Wlodarczak, entertainment/interactive analyst, for Pivotal Research Group, says: “For now we are assuming the Olympics moves forward as planned -- either in Japan or possibly re-located to the U.K. In the event the Olympics are postponed/canceled, Comcast has insurance to cover costs.”

Sure. But where does it leave U.S. TV marketers -- as well as bigger worldwide Olympic marketing partnerships? Where is their insurance?

1 comment about "A Canceled Summer Olympics Is TV's Worst-Case Scenario".
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  1. Ed Papazian from Media Dynamics Inc, March 5, 2020 at 3:26 p.m.

    It's an interesting situation, Wayne. Let's say that the Olympics are cancelled die to the epidemic---if that materializes. What happens? First, NBC as well as its stations lose the ad dollars allocated by advertisers--at premium CPMs---for Olympic time buys, "sponsorships", etc. Second, NBC  doesn't pay for the rights to air the Olympics nor all of the attendent production and promotional costs, junkets by time buyers,  "sponsors", etc. Third,  low cost filler programming --at lower CPMs ----fills the programming void--which will garner ad dollars---but not as much as would have been raked in if the Olympics were on viewers' TV screens. So is cancellation of the Olympics really a financial disaster for NBC and its stations---who sell station break ads to spot TV buyers in theri markets? Maybe not. In fact when it comes to money, we should think about the relative profiatbility of the content, not just its dollar volume. How profitable are the Olympics to NBC as a network? Maybe not so much. On the other hand, they are, indeed, a welcom source of profit for the network's O&O stations and other affiliates. These are the ones who will suffer as they have no program costs to amortize---they are merely selling adjacencies to network-supplied content--whatever that happens to be.

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