NBC reports financial loss after Beijing Olympics, claims profit is on the way

by yuls.source | October 13, 2008 at 10:30 am | 141 views | add comment | 0 recommendations

NBC, one of the largest American television networks, held the exclusive right to host the 2008 Summer Olympics Games coverage for the US. Despite generating over $1 billion in revenue from the Olympic coverage, NBC has reported a loss of undisclosed size in its third quarter. The network is still hopeful to come out with a profit at the end of the year, and claims its third quarter loss stems from the way Olympic revenues and expenses are booked by accountants. My guess is that the availability of free online Olympic content played a significant role in contributing to NBC's financial loss. So the question arises, will major TV networks keep investing a lot of money into Olympic coverage and compete with YouTube (and other popular participatory sites), when their Olympic profit margins are getting so thin or even negative?

A spokesman told The Hollywood Reporter though that at the end of the year, the Olympics will make NBC Universal a small profit due to the way they are accounted for.

"There is additional revenue that will be realized in the fourth quarter," he said. "This has been standard for all Olympics NBC Universal has broadcast."

NBC Universal CEO Jeff Zucker has also talked about a slight profit for the Summer Games.

"The Olympics were profitable, not wildly profitable, but we made money on the Olympics." He also added: "You measure success in other ways than just what it's done for the bottom line."

Ratings for the Summer Games exceeded expectations by 20%, according to GE CFO Keith Sherin who on Friday lauded the company's work and efforts around the event..