BBC Faces Long-term Threat To Olympic TV Deal

The BBC’s stranglehold on the TV rights to the Olympic Games could be under
threat as the International Olympic Committee gave a major hint that it would
consider the claims of other broadcasters for the contract after the London 2012
Games.

The BBC currently holds the TV rights to the Olympic Games running through
until London 2012 after striking a long-term deal with the IOC in 2004. 

The IOC, which is in the middle of the negotiating process for broadcast
rights to the 2010 and 2012 Olympics in other territories, has traditionally
struck an all-encompassing deal for the European media rights with the European
Broadcasting Union – the single body representing the interests of the primary
terrestrial broadcasters across the continent.

The BBC has been the beneficiary of this arrangement holding an uninterrupted
tenure on Olympic TV rights in the UK since the EBU’s conception in 1950.

However, in recent years, questions have been raised as to whether the IOC
could garner more revenue from TV rights sales if it conducted an open bidding
process in Europe region-by-region as opposed to striking a single deal with the
EBU.

The IOC now appears to be acting on these thoughts after it went outside of
its traditional method of a similar pooling procedure in Latin America with
representative body OTI to strike an exclusive rights deal with privately owned
terrestrial broadcaster TV Record in Brazil.

The deal, announced last week, sets a precedent that the IOC is not afraid to
look outside of its existing pooling arrangements with regards to TV rights and
could see the introduction of a similar open bidding process in Europe.

Should the IOC go down this road in the UK, it would open up the bidding
process for the Olympics post-2012 with the likes of ITV, Channel 4 and Five
able to compete freely with the BBC for the rights.

The government’s listed events ruling currently decrees that the Olympics
must be broadcast on a terrestrial channel in order that it is made available to
the widest possible TV audience – a scenario that rules the likes of Sky,
Setanta and Virgin Media out of the bidding.

However, with more and more homes now with digital access and the UK
government stating that the complete switch from analogue to digital TV take
place by 2012, there is every chance that the listed events ruling will be
revamped after London 2012.

The IOC made $394m from its deal with the EBU for European TV rights coverage
of the Athens 2004 Olympics – a figure that could rise significantly should it
adopt a region-by-region selling approach after 2012.