NBCUniversal is hoping that Americans will soon be talking about gold medal-worthy Olympic vaults by Simone Biles and winning goals by soccer star Megan Rapinoe — not the coronavirus pandemic.
As the official broadcaster of the summer Olympics, the Peacock Network is facing numerous threats that stand to make this year’s games a ratings dud.
And that would be bad for business, including NBC’s new streaming service, experts say.
“If I was an executive at NBC right now I’d be hoping that the Olympic Games, No. 1 start, and No. 2 get to completion,” said LightShed Partners analyst Rich Greenfield. “This is certainly not going to be the Olympics NBC was hoping for.”
The Olympic games are set to open on Friday in Tokyo as the coronavirus pandemic continues to ravage countries around the world. On Monday, Japanese carmaker Toyota said it would be pulling its Olympic ads in Japan amid a nationwide backlash to the games being hosted during a state of national emergency.
Other threats to the popularity of this year’s games include a ban on spectators and a steady drumbeat of athletes contracting the virus, and in some cases dropping out of the games entirely.
Over 70 athletes have contracted the virus in Tokyo so far, including fan-favorites like tennis player Coco Gauff, who pulled out of the global event earlier this week.
Without star athletes, ratings stand to suffer. And while NBC has already locked in over $1 billion in Olympic ads, poor ratings threaten to create a knock-on effect for other revenue streams.
Low ratings could dampen new sign-ups to Peacock, the company’s all-important streaming service, which is providing live coverage, replays and special programming of the Games, analysts said.
Sagging viewership could also reduce ad spend on NBC shows leading into the Olympics — or following the broadcast, experts said.
“We’re starting to lose spectators and athletes. How big is this problem going to get?” said Greenfield, who noted that Olympic 2021 ratings could fall to 20 million, sinking below the weak ratings of 25 million NBC hit in 2016 for the games held in Rio.
Other experts have estimated even more meager viewership of 17 million, citing the 13-hour time difference and the lack of pre-game promotional ads from the network.
NBC paid the International Olympic Committee, which holds the media rights to Games, $4.4 billion for the four Olympics spanning 2014 to 2020 and another $7.75 billion for the next six games running 2022 through 2032.
Prior to the pandemic halting the summer games last year, NBC said it sold $1.25 billion in advertising tied to the event. With the event now rescheduled for 2021, NBC has not publicly updated its figures, but recently said it expects to exceed ad sales from Rio Games, which came in at $1.2 billion.
Adding to NBC’s woes, the pandemic continues to spread in Japan, where only 20 percent of the population is fully vaccinated. According to Reuters, Japan has been averaging over 3,000 new infections a day.
As a result, the IOC instituted numerous on-site restrictions, including banning spectators, social distancing for everyone else, and enhanced cleaning protocols.
And NBC spokesman on Wednesday said: “We’re excited to once again bring the biggest event in the world to American audiences on our many NBCUniversal platforms, and to showcase the world’s greatest athletes as they come together to compete in Tokyo.”
NBCU chief executive Jeff Shell and other top brass have also opted to downplay the ratings threats and instead act as cheerleaders for the international sporting event.
At a virtual Credit Suisse Investor Conference last month, Shell brushed off the potential disaster hanging over the Games, saying: “I lived in London [in 2012], and everybody was worried about the traffic, and last time it was Zika, and you know, once the opening ceremony happens, everybody forgets all that and enjoys the 17 days. And I think this is going to be the same thing.”
The CEO predicted that the Games could be “our most profitable Olympics in the history of the company,” which has broadcast the event 15 times prior.
The IOC generates nearly 75 percent of its income from selling broadcast rights and NBC is the single largest source of that revenue, accounting for about 40 percent of the total.
“I have a feeling that these Olympics will have a ratings decline,” said Patrick Rishe, a sports business professor at Washington University in St. Louis.
“Last summer when nothing was going on, if the Olympics had run then it would have stood out as being the only thing that’s on TV,” Rishe added. “You can’t say that now.”
