Filed under: General Electric (GE), Marketing and advertising, Business of sports
The New York Times reports that General Electric Company’s (NYSE: GE) NBC Universal invested $894 million to secure the broadcast rights for the Beijing Olympics and it expects to earn a $100 million profit. The Times also quotes CEO Jeff Immelt as saying that the benefits to GE are even greater — including “$700 million worth of services it is providing for the Games and its long-term relationship with China, where it does more than $4 billion worth of business.”
How did GE make a profit on its Olympics investment? The Times reports that it was lucky that no big protests or press censorship marred the games. And it negotiated with the International Olympic Committee (IOC) to schedule popular competitions — such as swimming and gymnastics — to coincide with prime time slots and to including much more Internet and on mobile device events streaming.
The Games have attracted enormous audiences. According to the Times, “the Games have drawn an average audience of about 30 million a night on NBC itself, millions more on NBC’s cable channels, 30 million unique visitors to NBC’s Olympics Web site, 6.3 million shared videos from the coverage streamed on the site.”
Unfortunately, the ideal of the Olympics is behind NBC. The Times reports that Michael Phelps’s eighth gold medal win “was its most-viewed Saturday program in 18 years. From 11 to 11:30 p.m., when the Americans swam in their medal-winning medley relay, 39.9 million viewers were watching.” And that anticipated $100 million profit is 0.5% of the $20 billion in what I estimate GE will earn in net profit in 2008.
It remains to be seen whether the good news for the Olympics will make more people watch NBC’s fall lineup. But it’s still nice to write about some good GE news.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns GE shares.
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