After two Games away, the CBC has won back the rights to broadcast the Olympics in Canada.
The public broadcaster announced Wednesday they alone will air the 2014 Winter Games in Sochi, Russia, and the 2016 Summer Games in Rio de Janeiro, Brazil, after making two unsuccessful joint bids with Bell Media.
This means the team of Canadian broadcasters currently working the 2012 London Games — including Brian Williams and James Duthie — will not be back in two years time.
Bell and Rogers Communications — owners of CTV, TSN and Sportsnet — partnered in 2007 to form the Canadian Olympic Broadcast Media Consortium in order to outbid the CBC for the broadcasting rights to the 2010 Vancouver Olympics and the 2012 London games.
But after losing an estimated $20 to $80 million on the Vancouver games alone, neither telecommunications giant was willing to make a bid that satisfied the International Olympic Committee, which negotiates media rights on a country-by-country basis.
Terms of the CBC’s agreement with the IOC are confidential.
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The announcement of CBC’s successful solo bid is surprising, given that they could not win the bid when partnered with Bell.
“Our situation is different when we go it alone,” said Kirstine Stewart, head of CBC’s English services. “We have a long-term relationship with the IOC, we have a lot of experience in handling the Olympics in terms of production, how to handle it and what those costs were.”
Last September the CBC and Bell announced a partnership to bid on the next two Olympics. In January, IOC rejected their first bid, reportedly worth $70 million. At that time, Rogers executives said the company was no longer interested in broadcasting what for them had become a money-losing event.
When a second CBC-Bell bid was rejected by the IOC, Bell also pulled out, leaving the “Mother Corp” as the last broadcaster standing.
Stewart refused to discuss financial details, so it’s unclear whether the CBC made a higher bid on their own or if they got a discount when the IOC realized they had little leverage and only a single bidder.
“We decided that the CBC being such a supporter of amateur athletes, being kind of synonymous with Canadian celebration and pride … we couldn’t let it go without one more try,” Stewart said of the CBC’s determination to get a deal.
The reported dollar figure of the rejected bid — $70 million — represents less than half of the $153 million Canada’s Olympic Broadcast Media Consortium is believed to have paid the IOC for the rights to the Vancouver and London Olympics. Production costs for the Vancouver games alone cost the consortium nearly $100 million.
So it appears as if Rogers and Bell bowed out because they could not find a way to make broadcasting the games a profitable endeavour.
Stewart said the CBC is inherently different than a group of private corporations.
“They have a lot of cost considerations that we don’t necessarily have when we go alone. We’re just in a different position. Our bid is structured completely differently than the private broadcasters would be.”
Stewart said the CBC is confident the project will be cost-neutral.
“That’s kind of how we do it here at the CBC. We try to make sure that in the end, if we’re not making a ton of money, we’re at least not losing money.”
After producing 19 previous Olympic Games, the CBC has a “solid” understanding of associated costs and revenues, she said, adding that the public broadcaster broke even on their last 10-year deal with the IOC.
The announcement also comes while the CBC has slashed programming and operational costs as a result of federal budget cuts.
But Stewart said their Olympic bid is a separate project and, as she said, projected to be cost neutral.
“This isn’t robbing Peter to pay Paul; this is an independent project of its own,” she said.
Stewart said there is even a chance the CBC could make a profit, despite the losses suffered by Bell and Rogers at the 2010 games.
“We’re not about to take a lot of big risk given the position we’re in right now,” Stewart said. “… It’s obviously a difficult time right now for us, not a time when we have lots of extra pots of money going around.”
The shift back to the CBC after a two-Games’ absence will mean an end to the brief Olympic anchoring careers of TSN personalities Duthie and Darren Dutchysen, as well as CTV host Lisa LaFlamme.
But most intriguing will be what comes of Williams, the longtime Olympics’ host who announced in 2006 he would leave the CBC for TSN — and was subsequently fired by the public broadcaster — after the CBC lost the 2010 and 2014 Olympic broadcasting rights.
Stewart refused to comment on Williams, as he is employed by another company. “We have a great Olympic team here and we look forward to producing a great Olympics,” she said.
The CBC’s commitment to broadcast the next Winter Games also comes without any guarantee that NHL players will participate. The league and the players’ association are currently engaged in collective bargaining, which includes the thorny issue of whether or not the league will suspend the 2014 season to allow the world’s best players to compete in the international competition.
Stewart said the CBC believes Canadians will watch Olympic hockey whether or not NHL players are involved.
“We’re not predicting either way,” she said. “That’s their call in the end. We do know that games like the World Juniors and other hockey events like that have huge viewership and following. People love hockey in Canada, so I think regardless we’re going to have a good time with hockey at Sochi.”
The announcement of the successful Olympic bid also raised questions about the CBC’s contract with the NHL, which is set to expire in 2014. TSN and Sportsnet — respectively owned by Bell and Rogers — are expected to battle hard for the CBC’s rights to broadcast NHL games involving Canadian teams.
“We are very pleased for the CBC,” said Billy Daly, the NHL’s deputy commissioner. “They are a rights holder and a good, long-time partner. Not prepared to say what impact, if any, the acquisition might have on future renewal discussions.”
Ian Lee, a sports marketing expert at Ottawa’s Carleton University says the CBC was likely able to lowball the IOC and almost certainly paid far less than the original consortium bids the network had tendered with Bell.
Lee, who has made a study of Olympic business practices, says networks around the world are now calculating bids based on the knowledge that they can no longer control the flow of programming from the Games, and that their advertising revenues will suffer from this internet and social networking leakage.
But the IOC, which had gotten rich off of the ever more profitable media bidding wars of yore, has yet to catch up to this reality.
“I believe the IOC did overplay its hand because they have gone from Olympics to Olympics getting more and more money…from the Montreal Olympic going forward,” Lee says.
“The IOC’s mind set in is in the Olympics of 2008 and BCE ‘s mindset is pricing the Olympics for 2014, 2016,” he says.
Lee says Olympic officials – having rejected the earlier bids – were faced with the potential of no bidders from Canada and would likely have deeply discounted the rights for a CBC savior.
“There is only one thing worse than getting a lowball bid and that’s getting no bid at all,” he says.
“They made a serious strategic mistake in rejecting (the consortium) bid and they woke up and said ‘oh my God, we’ve got nobody left’ and the CBC saved the day. And I’ll bet you it the (CBC bid) wasn’t very much”
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