GE Discloses Chilly NBC Olympic Ad Sales, Break Even At Best

The Winter Olympics look to be colder financially for NBC than the network had predicted. Jeff Immelt, General Electric's Chairman-CEO, Friday said NBC would bring in between $650 million and $750 million in revenue and break even on the Torino games.

NBC, part of GE, had said it would bring in $900 million in ad revenue for Torino--a 22 percent increase over Salt Lake City in 2002. The network said it had sold more than 90 percent of its inventory with prime-time spots going for $700,000 each.

Now, things look less golden. Even if NBC approaches the high end of Immelt's projections, it may struggle to break even, with rights fees reported at $614 million and production costs estimated at well over $100 million. Immelt made his comments during GE's fourth-quarter earnings conference call.

Still, a break-even Olympics could help the limping NBC network in the long run. Coverage from Feb. 10-26 means a surefire sweeps victory and a winning promotional platform for its regular schedule, including new programs set to launch after the games. NBC is the flagship television brand in the NBC Universal unit, which will carry a record 416 hours of coverage on broadcast and a fleet of cable networks from USA to Universal HD.

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On the conference call, GE SVP Finance and CFO Keith Sherin said that "overall, including all the affiliate contributions and the sub-fees that we get in the years when we're not in the Olympics, this is a very profitable franchise for us." NBC will carry the Olympics every two years through the London games in 2012.

Both Immelt and Sherin sought to paint a rosy picture of the NBC network overall, highlighting comedies "The Office" and "My Name is Earl." But they did so just hours after the network finished third the night before--again. NBC recently revamped its Thursday lineup, rebuilding the 8-10 P.M. comedy block, and Sherin said: "The Thursday night strategy is working." NBC pointed to the success of "The Office" as a popular iTunes download and "Earl"'s strong freshman year performance in the key 18-49 demo. "We saw some good progress from a comedy standpoint," Immelt said.

Overall, however, NBC's lackluster ratings caused the NBC Universal unit to incur a 3 percent decline in revenue to $4.2 billion in the quarter and a 7 percent drop in profit to $801 million. The poor NBC results were offset by strong performances in the unit's entertainment cable properties, particularly Sci Fi and USA.

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