Los Angeles and Paris are neck and neck in their race to host the 2024 Olympic games, and the holder of Europe’s broadcasting rights is hedging its $1.4 billion bet on which city and time zone will prevail.
Discovery Communications Inc.’s Eurosport is trying to strike a deal with French broadcasters before the final decision is made by September, according to a person familiar with the talks. Should it be Paris, the winning French channel could get the world’s biggest sporting event at a discount on home soil. But if Los Angeles is picked and the games aren’t in European time zones, it means the French channel will have overpaid.
Eurosport’s rights would be faced with a “huge financial hit” if the games are in Los Angeles because a large proportion of the events would be broadcast in the early morning, said Tim Crow, chief executive officer of Synergy, a firm that advises Olympic sponsors. “You could say it would lose over half its value,” Crow said.
NBC has tied up broadcasting rights for the U.S., the most lucrative market by far, but it’s the first time a single network has owned television rights across Europe. Eurosport is paying the International Olympic Committee for the two winter and two summer games though 2024 -- excluding the rights to Tokyo 2020 in France and the U.K. -- an agreement made just before Discovery took control of the channel two years ago.
Eurosport has been re-selling rights to local sub-licensees, including the U.K.’s BBC, to guarantee payback on some of its outlay. In countries like Germany where it hasn’t resold rights, Eurosport will broadcast some events for free on its own channel.
While the Olympic rights catapult the broadcaster into the mainstream, the importance of the deals reflect the state of the embattled Olympic movement, which relies on television contracts for about three-quarters of its revenue. The IOC has been left with two bidders after cites like Boston, Rome and Budapest pulled out amid public pressure over the cost of the games.
Last Europeans
The fear at Eurosport is that if Paris isn’t chosen in 2024, there may be a dearth of future European candidate cities, according to the person familiar with the company’s position, who asked not to be identified because the negotiations are private.
CEO Peter Hutton said by email the company had already concluded more than half of its agreements to ensure free-to-air broadcasts and will also sign up operators to show the games on mobile phones. “We have struck a number of deals with the biggest and best broadcasters,” he added. “Our business rationale and commercial objectives have never been dependent on the location of any one of the Games, and remain ahead of target.”
IOC President Thomas Bach has suggested giving the 2028 games to whichever city isn’t selected for 2024. Paris said it has no interest in staging the games four years later and Los Angeles said it’s focused on its current bid.