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.
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.