NBC shells out $2.2 billion for Olympic broadcast rights

NBC can’t get enough of the Olympics. The network has secured the broadcast rights to the 2010 Winter Olympics and 2012 Summer Olympics at a cost of $2.201 billion, according to the International Olympic Committee (IOC) in Lausanne, Switzerland.

Viewers all over the world watch the Olympics for amazing feats in sports. Now NBC has paid $2.2 billion to broadcast both the winter and summer events. (Photos courtesy Panasonic)

Apparently, the Olympics — with its 17 days (two weeks and three weekends) of sporting events — is a good business model for NBC. Not only did the network purchase the television rights at a record high price, but parent company General Electric committed to pay between a minimum of $160 million and a maximum of $200 million in a “top sponsorship” program with the IOC.

All of the Olympic frenzy is in contrast to other sports, where NBC Sports Chairman Dick Ebersol has chosen to drop out of bidding rights for major American sports properties such as the National Football League, Major League Baseball, and the National Basketball Association.

“We’re out of those sports because we couldn’t see any being successful business arrangements going forward,” Ebersol told the Boston Globe. “In recent years, as you see almost daily, the business of big-time American sports is out of hand. That’s not true of the Olympics. Atlanta, Sydney, and most recently Salt Lake City, all were profitable for us. And all indications, from one year out, are that Athens will be, too.

“The Olympics aren’t just a sporting event,” Ebersol continued, “they’re a family event, and that makes them enormously attractive to us, our affiliates, and our advertisers.”

Locations for the two additional Olympic events have not yet been determined. Vancouver, Salzburg (Austria), and Pyeonchang (South Korea) are the finalists for the 2010 Winter Games. The IOC will announce the host city July 2. The 2012 Summer Games decision won't be made until 2005. Moscow, Paris, London, Madrid, New York, Havana, and Leipzig (Germany) have initiated official bids.