Despite the major audible and resulting complications, television experts agree that, given the circumstances surrounding the global spread of the virus, the one-year postponement actually represented the best possible outcome for NBC — an assertion backed by the network’s own efforts to nudge the organizers of the Games in that direction.
“It’s the best of all the bad options,” said Chris Bevilacqua, a sports media rights consultant who has worked with the IOC. “You’re not losing the Games, and you still get them in the summer."
According to two people familiar with the conversations, executives from NBC’s parent company, Comcast, had been in touch with Olympic officials in recent days, making their scheduling preference known: They wanted the Games postponed for a year rather than a few months until this fall.
Other factors contributed to the choice of the one-year delay, including international sports calendars and the uncertainty related to the spread of the virus. But NBC is an influential stakeholder in the Games. More than 70 percent of the IOC’s nearly $6 billion from the current four-year Olympic cycle comes from TV revenue, and of that TV revenue, NBC pays roughly half. In the United States, the network is paying roughly $1 billion for the broadcast rights of the 2020 Games alone.
One member of the IOC said that while the considerations of television and other partners were taken into account, the decision was ultimately made based on health and safety considerations.
“We never had a problem in all my dealings with television and marketing and the IOC, with the sponsors or broadcasters trying to influence decisions of that nature,” IOC member Dick Pound said. “They understand we’ll do our best and do what we can to protect their interests and positions, but we’re not going to ignore public health warnings of this nature.”
The timing of the postponement is nonetheless favorable for NBC. If the Games had been delayed only until this fall, the Olympics would have had to compete with the NFL and college football in the United States, along with a number of other events that have been pushed from this spring, such as the Masters. NBC is already making plans to shoehorn the French Open and Kentucky Derby into its fall schedule after they were moved from their usual spring dates. The Stanley Cup playoffs, another NBC property, are in limbo for now, with the NHL’s regular season suspended indefinitely.
Tuesday’s postponement also avoids, at least for now, the calamity of a canceled Games. The Olympics are critical to NBC. During the Summer Games in Rio de Janeiro four years ago, average nightly audiences reached roughly 25 million. Comcast CEO Brian Roberts has said the company has insurance in case of a cancellation that would reimburse its costs, but insurance would not cover the advertising windfall the company would miss out on without the Games. In 2016, advertisers spent around $2 billion over 2,084 hours of programming on NBC’s linear TV channels, according to analyst firm Kantar Media.
NBC had already sold more than $1 billion of advertising for the upcoming Games. Now, the network must work with those advertisers on remedies, potentially reimbursing those costs or moving them to 2021. NBC said it was “actively working with our advertising partners to navigate this postponement, and we’re exploring all options to best serve their brands and our consumers this year, and into 2021.”
Richard Broughton, research director at the London-based media firm Ampere Analysis, said the advertising situation may work out for NBC.
“It’s obviously a hit in terms of audiences and the associated ad revenue [this year],” he wrote in an email, “but with the underlying loss of confidence in the market from many advertisers, and certain sectors pulling back entirely, the ability for NBC to shift a big cost line-item to next year when advertising budgets are gearing up again, may actually be, on balance, a reasonable outcome for the broadcaster.”
Even if the current plan is palatable to NBC, it is by no means ideal. Comcast has plans to roll out the company’s new streaming service, Peacock, to compete with Netflix and Disney Plus this summer, just ahead of when the Olympics would have begun. The Opening and Closing Ceremonies were to be streamed live, and Comcast will now lose the opportunity to market the new service to a huge TV audience.
Additionally, there is the logistical nightmare of changing travel plans, reservations and housing situations for the thousands of NBC employees who are part of the coverage of the Games.
The network struck a note of optimism in a statement released Tuesday: “Given the unprecedented obligation we all face to contain covid-19 globally, we fully understand the decision made by the IOC, Japanese government, and the health organizations they are working with to postpone the Tokyo Olympics and Paralympics until 2021. We have no doubt that the IOC and Tokyo Organizing Committee will put on an exceptional Games next year, and that the Olympic flame will once again unite the world and provide a light at the end of this tunnel.”
Bob Costas, who hosted NBC’s prime-time Olympics broadcast for many years, noted that there was one other silver lining to the delay.
“Whenever it is they return, sports are going to be valued more than ever,” he said. “It’s going to be part of people’s sense of a return to normal and an enjoyable shared experience. The Olympics have always had that quality. I think this one, whenever it happens, it will have an added element of interest and maybe attraction, too.”
Adam Kilgore contributed to this report.