IOC Rejects CBC/Bell Olympic Bid

In a column this morning, Rick Westhead of The Toronto Star reports that the International Olympic Committee has rejected CBC and Bell’s bid to broadcast the 2014 and 2016 Olympic Games because it is too low. According to the article, CBC and Bell offered the IOC $70 million for the rights to the Games in Sochi and Rio. CTV and Rogers paid $153 million for the 2010 Winter Olympics in Vancouver and the upcoming Summer Olympics in London. CBC paid $73 million for rights to the 2006 Winter Olympics in Turin and the 2008 Summer Olympics in Beijing. It is unheard of for Olympic broadcasting fees to go down, usually they substantially rise. NBC’s bid for the 2014, 2016, 2018 and 2020 Olympics averaged about $1.1 Billion per Olympics, which is the same as the average price they paid for the 2010 and 2012 Olympics.

CBC and Bell first announced they would bid together for the Olympics in September, following the announcement that Bell’s partner for the 2010 and 2012 Olympics, Rogers, has opted out of their deal with Bell. Rogers executives have stated that they won’t bid for the upcoming Games in Sochi and Rio. Aside from CBC/Bell, there are no serious bidders for the 2014/2016 package in Canada. As a result CBC/Bell will want to bid as low as possible; however, the IOC has an option to reject all bids if none are up to their standards. This means it is possible, although unlikely, that nobody will broadcast the 2014 and 2016 Olympics in Canada.

In order to push CBC out of Olympic broadcasting, CTV and Rogers overbid on the 2010/2012 package, inflating the base price in the Canadian market. Nobody expects CBC/Bell to pay anywhere near the 2010/2012 rate, mainly because there isn’t a home Olympics in this package. However, when compared with 2006/2008, the fee for 2014/2016 should be higher based on the host cities alone; even without taking other factors into consideration. The 2006 Olympics were in Turin, which is 6 hours ahead of the Eastern Time Zone. Most events took place while Canadians were at work, but a few hockey games and figure skating programs (two of the highest rated Winter Olympic sports in Canada) took place in the late afternoon Eastern, allowing Canadians to catch the conclusion as they came home from work or school. Most viewed the games on tape delay in primetime. Sochi is 8 hours ahead of the Eastern Time Zone, which means that viewing habits will be similar to 2006. On the other hand, Rio is in the same time zone as the Maritimes during our summer. This will mean that major sports like athletics, gymnastics and swimming will take place in North American primetime.

These factors should increase the value of the games based on the 2006/2008 package. I’d guess somewhere around 80 million; maybe more. I don’t know what more the IOC could ask for considering how bad it would look on them if the Olympics weren’t broadcast to a major country like Canada. If NHL players confirm their participation in the 2014 Olympics, then CBC and Bell would probably bid more. This issue is a major topic in the upcoming NHL/NHLPA collective bargaining talks. CBC/Bell originally intended to submit two bids, one if NHL players participate and one in case they don’t. According to the article in The Star, the IOC rejected that idea. As a result, I could see CBC/Bell waiting a few more months to see what decision the NHL and its players make on playing in 2014. Olympic hockey, with NHL players, is what brings in viewers and sells ads. Without it, CBC/Bell would lose even more money on the Olympics.

One problem that CBC and Bell face is time. The Sochi Olympics are only about two years away. Test events in alpine skiing take place this Feburary. Everyone else is preparing for Sochi. The good news is that CTV already has an Olympic production crew in place. CBC also has plenty of employees – both on and off camera – with Olympic experience. I wouldn’t worry about the lack of a deal until fall, after the London Games are done. I think CBC/Bell and the IOC will work something out. There is too much to lose on both sides if the Olympics aren’t broadcast in Canada. CBC relies on the name recognition of athletes at the Olympics to boost their weekly amateur sports programs.

12 thoughts on “IOC Rejects CBC/Bell Olympic Bid

  1. Here’s a question:

    Assume for a minute no rights deal is done at all and no Canadian media outlet has the right to broadcast the upcoming Olympics. Could the IOC go to court force Canadian cable / satellite distributors to block US channels that are carrying the Games?

    If the answer is no, there is a chance that the Canadian broadcasters will take a stand and tell the IOC to take their Olympic Rings and stick them, for at least one Olympic games anyways, in a move to force right fees lower.

    With two of the major Canadian bidders being part of organizations that own transmission facilities (Bell – CTV, Rogers) that would broadcast the American signals anyways, I don’t think my idea is impossible.

    • There is no way NBC’s coverage could be blacked out; there are CRTC rules preventing the blackout of an American over-the-air channel (see, CRTC rules aren’t always bad). Channels like MSNBC and CNBC would be another question.

      Rogers is no longer a major bidder, so what they want is irrelevant. Bell stands nothing to gain from letting NBC have exclusive coverage in Canada. It just means people will watch NBC instead of CTV and (especially) TSN those nights. Especially if the NHL participates in 2014, what do you think most Canadians would choose, Olympics on NBC or some random NBA game on TSN? I’d go with the Olympics.

      • If you have to rely on just what NBC carries, you won’t get much from the Olympics. I feel bad for my fellow Americans without cable. They get the schmaltz and not a whole lot of sports. NBC carried very little hockey; didn’t even carry the first USA-Canada matchup in men’s hockey in 2010. Though NBC might feel different about hockey with the added investment.

  2. At this point there’s probably some posturing by both sides. CBC and Bell want to get it for as cheap as they can while the IOC is trying to squeeze some more coin out of them knowing that Rogers or anyone else (eg. Shaw/Global) won’t be bidding. Maybe CBC and Bell took a guess this would happen so they low-balled their first offer knowing they would have to come back with a higher offer later on. The longer it goes on the more other scenarios could unfold. Who gives in first or will both sides draw a line in the sand and say they’re not budging?

    • I agree with this.

      • CBC/Bell has the IOC by the balls and both sides know it. They’ll probably settle on something around the $90 to $100 million range.

        At the end of the day, the IOC won’t refuse a reasonable bid (even on the low end) because we know how much they love their cash.

        • If nobody else besides CBC/Bell is going to bid for the 2014 & 2016 Olympics and the NHL decides that they are going to Sochi, then I can see a bid in the neighbourhood of $150 million to $200 miliion. If not, I can see a bid of anywhere between $100 million to $125 million.

  3. Could this have any impact on the 2012 olympics?

  4. Pingback: TV, Eh? Industry Roundup – CBC/Quebecor, Andrea Martin, Yahoo, and more | TV, eh?

  5. Officially, Bell-CBC has dissolved the bid. Bell seems uninterested to go it alone. CBC is looking at its options. I would not be surprised to see Bell-CBC back together after 2012 bidding once again. CBC and the Score were bidders for 2010/2012 (which went to CTV-Rogers). CBC can’t do this alone, not after this lat package and not with the lack of funds they have. CBC wants HNIC and Olympics and with less money it is gonna be a battle.

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