Credits: SUN NEWS NETWORK
OTTAWA - Despite the fierce competition for the rights to broadcast the Olympic Games, it turns out the spectacular event is not a guaranteed money-maker.
As Mark Lazarus, chairman of the NBC Sports Group which carries the American broadcast rights, told reporters Thursday the network hopes only to break even, observers here in Canada have begun making similar predictions for the CBC. The state broadcaster announced Wednesday it was awarded the broadcast rights for the 2014 and 2016 games.
"I expect the CBC will break even," said sports-marketing expert Howard Bloom.
While neither the CBC nor the International Olympic Committee have disclosed the price tag for those broadcast rights, some estimates have put it between $95 and $110 million, significantly less than Bell Media paid, $153 million, for the rights to broadcast the Vancouver and London Games.
Coverage will also mean huge production costs for the CBC.
Adding to the uncertainty of the Games' profitability is the fact the NHL has not yet decided whether to allow its players to leave during the regular seasons to play in the winter games in Russia. At least in Canada, this has direct implications for ratings - and profits.
Ian Lee, professor of strategic management at the Sprott School of Business, believes the biggest Olympics challenge facing networks is that media consumers have more choice than ever when it comes to how they access the games - many of them free.
"The problem isn't that there's less demand for sports or entertainment," said Lee. "It's that with things like social media - YouTube - people get it for free."