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MAKEGOODS MEAN PAIN FOR SPAIN

Oct. 17, 1988
Oct. 17, 1988

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Oct. 17, 1988

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MAKEGOODS MEAN PAIN FOR SPAIN

NBC's low Olympic ratings may drive down the fees for the 1992 Barcelona Games

By William Taaffe

When the final TV ratings for the Olympics came out with a thud last week, a dark cloud must have descended over Barcelona, site of the 1992 Games. The U.S. broadcast rights to the Barcelona Olympics, which will be up for bid before Thanksgiving (talk about timing!), were valued before the '88 Games at upward of $500 million. Thanks to the Seoul Olympics' poor showing on NBC, the Barcelona organizers now may get $100 million less than they expected.

This is an article from the Oct. 17, 1988 issue

NBC guaranteed major sponsors ratings of 21.2 for those portions of the Seoul Games telecast in prime time. When the dust settled, the network's average came to 16.9, or 20% lower than projections and 27% worse than ABC's average for the 1984 Olympics in Los Angeles. NBC did beat out the other major networks 14 out of the 15 nights the Games were on, and that was enough to give it the best Nielsen ratings for the month and probably for the entire fall season. The only evening NBC lost was Oct. 2, when the closing ceremonies were upstaged by a made-for-TV movie about Liberace on ABC. Nevertheless, because NBC fell short of projections by an average of 3.8 million homes a night, it will have to give sponsors the equivalent of some $70 million in makegoods, which is televisionese for commercial time given by the networks to advertisers as compensation for not attaining guaranteed ratings.

Because of having to broadcast all those makegoods, NBC's anticipated $40 to $60 million profit from its operation in Seoul has vanished. The network will probably break even, because its seven TV stations, which had no overhead, are likely to realize a $30 million profit from the sale of local advertising. But the trend ain't pretty. Following on the heels of ABC's loss of an estimated $65 million on last winter's Games in Calgary, the Seoul Olympics was the second in a row that failed to produce a cent for the company that paid the bulk of the costs for putting on the Games.

There are many reasons that ratings suffered, chief among them the fact that these Games were the first ones to begin in September, when kids are back in school and a heavy diet of sports fare gluts the tube. One plus for the Barcelona Games: They'll begin in late July.

But there were other lessons to be learned from Seoul:

•In an age of falling ratings, the International Olympic Committee (IOC) had better negotiate the fees for the rights to future Olympics before the preceding Games begin. Hindsight is 20/20, but IOC president Juan Antonio Samaranch and the committee's TV chairman. Richard Pound, may well have blown it by not wrapping up a Barcelona deal before the ratings from Seoul came in.

•A live Olympics isn't necessarily more popular than a tape-delayed one. NBC hurt itself in the Nielsens by opting for 80% live coverage from Seoul. What good was having such American notables as Janet Evans and Matt Biondi on live when their events were running at 2:30 a.m. EDT? NBC should have broadcast more tapes of important events in prime time, when American viewers were ready and waiting to be engaged emotionally. But instead the network stayed live, even when that meant showing water polo for an hour, and the ratings never reached critical mass.

NBC's production was honest, immediate and technically superb. The ratings suggest, however, that most viewers aren't willing to hunt for programming of gymnastics and other premier events during odd hours. Spain poses a time-difference problem, too. When it's early evening in New York, it's bedtime in Barcelona, and there's normally not a lot of first-class Olympics action then. Whichever network gets the TV rights in Barcelona will have to walk a narrow line between live and taped action. The 1984 Winter Games in Sarajevo, some viewers will recall, turned out to be the Sominex Olympics because many of the results were known before ABC went on the air. Look for a Hollywood-style, celebrate-America's-medals version of the Barcelona Games each night. It's also likely that the network carrying that Olympics will for the first time sell the rights to individual events to a cable service. That means subscribers to the service may get a chance to see uncut coverage of basketball or other sports from the preliminaries through the finals.

•No longer can the Games be shown as a kind of four-star track meet-basketball tournament. Purists may have loved NBC's unemotional, just give-'em-the-sports approach, but the viewers didn't. Early in the first week, for example, NBC stayed with a U.S.-Canada basketball prelim in prime time while Greg Louganis, having cut his head the night before, was making a comeback on the springboard. "It looked like they were programming Saturday-Sunday-afternoon sports," says Bill Croasdale, director of network programming for the advertising agency Backer, Spielvogel, Bates. "That was a turnoff, particularly for the female audience." Indeed, women traditionally compose at least 50% of the prime-time Olympics audience. That ABC did better than expected in the ratings going up against the Games with a series of sitcoms suggests that NBC never hooked the female audience.

•Madison Avenue and the networks have got to start listening to the outcry over the plethora of commercials. When NBC's Week 1 ratings came in 15% below projections, the network added commercials during Week 2 to get a head start on makegoods. That not only depressed ratings even further but also brought an angry response from viewers. Some ad agencies are floating the idea of eliminating 15-second spots on the Olympics to avoid clutter. In addition, the networks should run fewer ads at higher prices, which would make viewers happy while generating the same amount of revenue.

With NBC licking its wounds, CBS and ABC have emerged as the front-runners in the race for the Barcelona rights. But the networks will now have to re-sharpen their pencils. As NBC Sports president Arthur Watson says, "No way Barcelona can be projected at a higher rating than Seoul—all of it will have to be taped except for what's on the weekend. They can say, 'O.K., we'll do events at midnight, which is 5 p.m. in the East,' but the athletes will bitch about that, and I don't think that will fly."

CBS, which is currently the third-rated network, may be eager for an Olympics double dip. The network already has the rights to the 1992 Winter Games at Albertville, France, and company president Larry Tisch has plenty of cash to spend from the recent sale of assets. The fact that CBS will have staff and equipment on-site in Albertville. only six hours by car from Barcelona, could save the network $20 million should it get both Olympics—a savings that could give it a leg up in the bidding.

Still, when the closing ceremonies are beaten by a Liberace bio-pic, you have to wonder where the price is headed. Three hundred and fifty million, anyone?

PHOTORICHARD MACKSONSamaranch may have hurt the IOC by not making a deal before the ratings came out.