News Corp Australia on Wednesday reported that Australia’s Seven Network will announce shortly that it has secured exclusive broadcast rights to the next three Olympic Games in Rio (2016), Pyeongchang (2018) and Tokyo (2020). If reports are correct it will see the Olympics return home to Australia’s traditional Olympic broadcaster, after the last three games were broadcast by a mix of Nine, Ten and Foxtel.
Reports suggest that Seven has agreed to a $200 million deal with the International Olympic Committee (IOC) for a three games package. The IOC had initially put a $250 million price tag on the broadcast rights package but a lack of bidders seems to have caused a reduction in the asking price. According to reports Seven was the only Australian network that lodged a bid with the IOC for the Australian broadcast rights.
Seven’s last Olympics broadcast was the 2008 Beijing Olympics. Nine and Foxtel covered the Vancouver and London Olympics, while Ten covered this year’s winter games from Sochi. Given there will be favourable time zones for Australian viewers of the games in Pyeonchang and Tokyo it is surprising that Nine and Ten did not participate in the sales process.
While broadcast rights for major sporting events are becoming increasingly expensive and some would say cost prohibitive, they can still have immediate and long-lasting benefits for the rights holders. They generate strong viewer numbers for the live broadcast which in turn provides a platform where networks can launch post-event programming off (i.e. the halo effect).
Media analyst Steve Allen of Fusion Strategy told Crikey on Wednesday that events like the Olympics bring in other benefits even if the straight profit and loss doesn’t add up. He said:
“They take up a lot of hours of air time, they do produce very strong audience numbers and they attract the kind of sponsorship revenue that is difficult to attract otherwise. It puts any network that carries this in touch with big advertisers and the big end of town.”
The most recent example of Olympic broadcasting in Australia is Network Ten’s coverage of this year’s Sochi Winter Games across TEN, ONE and tenplay. Ten’s coverage of the Sochi Olympics was for the most part a success. According to Ten the Sochi Games:
However Ten fell down because despite its Sochi coverage achieving strong viewer numbers there was little or no halo effect for the free-to-air network post-games. Ten has only since May seen significant audience increases after the latest seasons of Masterchef and Offspring started (the audience share is up 23% since May).
The failure by Ten to capitalise on any potential halo effect is more likely due to a weak first-half programming slate rather than the Olympics failing to deliver a key promotional platform for Ten. A broadcaster can leverage broadcasts of Olympics and other major sports to drive regular programming. For example Seven successfully launched Packed to the Rafters after its coverage of the 2008 Beijing Olympics and continues to successfully leverage the Australian Open tennis to promote and launch its new programming each year.
There has still been no official announcement from the IOC or Seven. When and if an announcement is made we will cover it here on FrostGlobal.com.
At the close of the market on Wednesday shares in Seven West Media (ASX Code: SWM) closed down $0.06 (-3.27%) to $1.92.