IOC looks to UK to drive European broadcast income beyond $1 billion

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The International Olympic Committee (IOC) has kicked off the process of selling United Kingdom broadcasting rights to the 2014 and 2016 Olympics.

Participants in the tender process for Sochi 2014 and Rio 2016 have been asked to submit bids by June 29.

The tender also provides the opportunity to bid for the 2018 Winter Olympics in Pyeongchang and the 2020 Summer Games to be staged in either Istanbul, Madrid or Tokyo.

This timetable appears to leave open the possibility of negotiations between the IOC and broadcasters while London 2012 fever is at its zenith.

As such, it may be an astute commercial move by Lausanne.

Broadcasting rights to the Games constitute the Olympic Movement's biggest single source of revenue, raising close to $4 billion (£2.7 billion/€3.2 billion) in the period covering the Vancouver 2010 Winter Olympics and London 2012.

The BBC, which has shown the Games every time they have been televised, beginning in 1948, is likely to face strong competition to hang onto the rights.

It is thought that participants in the tender could include Rupert Murdoch's BSkyB and possibly other pay-television networks.

The Olympics are among ten so-called "crown jewel" events in Britain, meaning in effect that they must be available on free-to-air television.

However, pay-television operators might decide to team up with one or another free-to-air network.

Such partnerships may be encouraged by the expectation that the list of free-to-air sports events will be reviewed in 2013, in the wake of digital switchover in the UK.

Though it is all but inconceivable that the Games would be removed from the list entirely – and the Olympic Movement is in any case wedded to the notion that all key moments of any given Games in any given country should be as widely accessible as possible – it does not seem far-fetched to imagine that the opportunity might be created for some coverage to migrate to pay-TV.

The IOC has changed the way in which its European rights are being sold in this cycle of negotiations.

Rights to 2010 and 2012 across 51 mainly European countries were sold in one fell swoop in 2004 to the European Broadcasting Union (EBU).

The deal, which excluded Italy, was valued at $746 million (£479 million/€592 million).

This time, following a breakdown in talks in 2008 between the IOC and the EBU, rights to most European markets, including the 2014 host Russia, were sold to Sportfive for $315 million (£202 million/€250 million).

However, six major European markets – France, Germany, Italy, Spain, Turkey and the UK – were kept separate from this agreement.

Deals have now been concluded in all these markets, save the UK, raising more than $600 million (£385 million/€476 million).

At the time of the Sportfive deal, it was reported that the IOC had wanted a fee in excess of $1 billion (£642 million/€794 million) from the EBU for the 2014-2016 rights.

If it raises over $71 million (£46 million/€56 million) from the UK, it will have achieved that aim.

With rights in Spain, France, Germany and Italy all fetching substantially more than that, it looks highly likely that the IOC will reach its goal, in defiance of the economic and fiscal turmoil sweeping the continent.

-David Owen

Source: www.insidethegames.biz

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