olympic losses

cbc says games pay for themselves, but experts beg to differ

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the international olympic com- mittee and Toronto’s bid team can tell us until the marathoners come home that the Games are all about the athletes. But any couch potato can tell you TV’s the payoff.In Canada, the CBC has a five-game, $160-million (U.S.) deal with the IOC that started with the Sydney Games last summer and runs through to 2008. But while there’s been much scrutiny of the amounts all three levels of government will fork over to subsidize infrastructure for the Games if Toronto wins, there hasn’t been a peep lately about the public broadcaster’s multi-million-dollar stake in the Olympic circus.

Of course, the CBC has to be careful about how it manages the Olympics. While it hypes the nationalist benefits of carrying the Games, it’s cut regional current affairs programming and laid off hundreds of staff. And while the CBC assures us that the coverage pays for itself, taxpayers are still very much exposed.

One source familiar with Olympic broadcasting rights says that due to the astronomical price tag on broadcast rights and associated production costs, “the Olympics are now at the point that it’s really a function not of how much money you’re going to make, but how much money you’re going to lose. The CBC needs reasons for Canadians to look at (the CBC).”

Unlike NBC, the CBC sees the Games as a nation-building exercise. During the CBC’s 1999 licence-renewal hearings, then network chief Perrin Beatty told the CRTC that “(Olympic coverage) is not commercially driven. It is driven because we think it is programming that is appropriate to have in the national public broadcaster.”

“It’s more a badge for the CBC to represent Canada,” explains Doug Newell, head buyer at Harrison, Young, Pesonen and Newell, a media management firm that buys advertising time during the Olympics. “There are a lot more emotional aspects to the CBC (Olympic) broadcast than the business aspect. But it’s not a bad business venture.”

During those licence-renewal hearings, Beatty claimed that there was “a slight profit on the Olympic Games” for the CBC from Nagano and Atlanta. However, the CBC will not reveal any of the revenue numbers from Atlanta, Nagano or Sydney. And for Sydney and the next four Games the CBC simply hopes to break even.

The network claims no money is coming from its government appropriation to finance Games coverage.

“The Olympics pays for itself,” insists CBC spokesperson Ruth Ellen Soles. “No government taxpayer money goes into our coverage. Through sponsorship it pays for itself.”

But in the past, private Canadian broadcasters who competed with the CBC for the Olympic broadcasting rights charged that public money had subsidized the CBC’s bid. In a 1994 report to federal regulators, CTV charged that the public broadcaster would lose over $10 million on the Atlanta Games and questioned how it accounted for production costs.

CTV admitted in the report that it had lost money broadcasting the Barcelona Summer Games and made only a small profit on the Lillehammer Winter Games.

“The risk that the CBC will not break even on the Atlanta Olympics is ultimately borne by taxpayers, who eventually are committed to covering advertising revenue shortfalls and/or other programming genres that will have to face cutbacks, further impairing CBC’s ability to deliver on its key programming mandates,” the CTV report said.

Of course, CTV had its own agenda. The private network was on the hunt for future Olympic broadcast rights and was only narrowly beaten out.

CTV is now a much different place than it was when that report was penned. It’s owned by BCE, and its recently acquired sports channel, TSN, has partnered with the CBC to deliver Olympic coverage through 2008.

CTV spokesperson Tom Curzon won’t comment on whether CTV now feels it could make money on the Olympics or whether it will be bidding on the broadcast rights in the future.

“I’m not prepared to talk to you about that,” says Curzon. “Of course, we examine every good property, and that’s one big property.”

Despite lacklustre ratings and more programming competing for the same advertising pie, Newell predicts that the Olympics will still pay off for the CBC in the end.

“The Olympics are a magnet, and they will continue to be,” he says.

Ian Morrison of Friends of Canadian Broadcasting says that even if the CBC loses money, it may end up losing less then it would if it ran its normal programming in those time slots.

“I sort of shrug at this thing and think it’s a good fit for the CBC,” says Morrison. “The only question, I suppose, is did they overpay (for the rights).”

Stay tuned. We won’t really know the outcome for the CBC and taxpayers until the fall of 2008.


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