David Owen: What the IOC’s deal of the century may tell us about Bach’s management style

Friday, 09 May 2014
David Owen And so it was in New York City, on or around November 6, the day when International Olympic Committee (IOC) President Thomas Bach addressed the General Assembly of the United Nations, that the Olympic deal of the century so far began to be put together.

At a dinner with NBCUniversal (NBCU) executives, Bach says he floated the idea of a long-term partnership with a broadcaster that had already screened every Summer Games since 1988.

After a further get-together in Sochi, the 2014 Winter Olympic host, the finishing touches were put to a breathtaking $7.7 billion (£4.5 billion/€5.5 billion) deal for US broadcasting rights to the Olympic Games between 2021 and 2032 this week.

The whole process took just six months - and this at the instigation of a man fewer than 60 days into his new job at the time of his bold opening gambit.

If you wanted to quibble, you might say it was overdoing it a bit to claim, as the IOC did, that the agreement ensures the "long-term financial security" of the Olympic Movement.

The panjandrums of this singular world, after all, would grumble and groan if this were the only deal in town, leaving them to scrape by for 12 years on a mere $8 billion (£5 billion/€6 billion).

By agreeing to these terms with Comcast/NBCU, moreover, the IOC is accepting relatively conservative growth from its most lucrative broadcast market far into the future, in a period of dizzying technological change that could do almost anything to global viewing habits and therefore rights values.

As Comcast chairman and chief executive Brian Roberts understatedly acknowledged: "No-one can be quite sure what the world looks like in 2032".

IOC President Thomas Bach and chairman and chief executive of Comcast Corporation Brian Roberts sign an agreement to secure the United States broadcast rights to the Olympics until 2032 ©IOC IOC President Thomas Bach and chairman and chief executive of Comcast Corporation Brian Roberts sign an agreement to secure the United States broadcast rights to the Olympics until 2032 ©IOC

What the deal has done, though - and it is no small thing - is secure far in advance perhaps 20 per cent of the revenue that the Movement would realistically want to have at its disposal over its 12-year span.

And, of course, the terms of this landmark agreement will inevitably colour negotiations on the web of smaller deals that Bach and his chief lieutenants will gradually begin turning their minds to.

As Bach said, bathing in the glow of what he described as a "happy day" for the whole Olympic Movement, "this kind of deal is not only about money".

Particularly since it comes so early in the German's Presidency, and at a time when a period of relatively quick-fire change on several fronts is expected, the agreement raises all manner of questions.

I would like to consider a few of them here:

Will strategic broadcasting deals of this sort of duration become more common?

Well, as people get used to being able to watch what they like, when they like and, increasingly, where they like, you can see that this is likely to have certain consequences.

First, desirable content is likely to become ever more valuable; second, investment in technology is likely to become ever more onerous for media companies.

If these media companies are confident that content which is popular today will continue to be so in a decade or two's time - and the Olympics appears to fall into this category - you can understand why a desire to capture reliable income streams to justify and pay for costly capital investment might make long-term agreements attractive.

Of course, if you are in something for the long haul, you must be sure you are comfortable with your partner.

But the IOC and NBCU have now worked together long enough to know each other warts and all. This is even though Comcast is a relatively recently-arrived owner, having announced its intention to acquire a majority stake in NBCU in late-2009; it now has full ownership.

The nature of this deal and the logic underpinning this sort of strategic partnership in the right circumstances has certainly got me wondering whether the IOC might not even now be quietly engaged on discussions with other trusted partners to gauge whether a long-term contract might be mutually beneficial for them too.

Talks between the IOC and NBC about extending their television deal until 2032 were already well underway when Thomas Bach was interviewed by the channel during Sochi 2014 ©NBCTalks between the IOC and NBC about extending their television deal until 2032 were already well underway when Thomas Bach was interviewed by the channel during Sochi 2014 ©NBC

What does this deal tell us about Bach's preferred management style?

In the early stages, Bach's Presidency has been positively collegial, with everyone encouraged to chip in to the Olympic Agenda 2020 reform debate.

This, though, looks to have been decision-making by kitchen cabinet, with the IOC President accompanied at the initial New York dinner by just two senior IOC officials - Christophe De Kepper, director general, and Timo Lumme, managing director, television and marketing services.

"We kept it among the three of us," Bach confided this week.

Indeed, the composition of IOC Commissions, such as the TV Rights and New Media Commission, charged with "preparing and implementing the overall IOC strategy for future broadcast rights negotiations" - which Bach himself will chair - for 2014 was not even announced until last month.

There are perfectly sound reasons, notably to avoid leaks and promote nimble decision-making, for restricting information flow to a favoured few in this way.

But I wonder if this might not lead to a greater tendancy among IOC members and others to take the Presidency's apparent collegiality with more of a pinch of salt.

If it does, it could in turn colour the Olympic Agenda 2020 process as it gears up to make some particularly big calls affecting the Movement's future around the end of the year.

Is the deal likely to have any impact on plans for a new Olympic TV channel?

Not directly; the feasibility study that Bach indicated he expected to have delivered "in the next couple of weeks" will have a more direct bearing.

I would not though be in the slightest bit surprised, if the undertaking gets the green light, to see Comcast somehow involved in bringing it to fruition.

Presumably, after all, one of the chief aims of a dedicated channel would be to get more people watching Olympic-related content in between Games, rather than when Games are on.

In this way, the venture should be complementary to the interests of Olympic rights-holders, if sensibly handled.

The new long-term deal between the IOC and NBC appears to have strengthened the chances of the United States hosting the Summer Olympics for the first time since Atlanta 1996, when they staged the Centennial Games ©Getty ImagesThe new long-term deal between the IOC and NBC appears to have strengthened the chances of the United States hosting the Summer Olympics for the first time since Atlanta 1996, when they staged the Centennial Games ©Getty Images

Does the deal increase the chances of the United States hosting a Summer Games in the near future?

If your definition of "the near future" embraces the 2020s, then undoubtedly yes.

Mark Lazarus, chairman of the NBC Sports Group, was completely justified in stating this week that "our success with the Games has never been contingent on the location of those Games".

But, seen in the context of the rapprochement between the IOC and the US that has been gathering momentum since October 2009, when President Barack Obama was tempted to Copenhagen for the 2016 host-city vote only for Chicago to be eliminated first, this deal has the feel of a pretty big statement.

United States Olympic Committee (USOC) chairman Larry Probst indicated this week that we should know by the end of 2014 if there will be a US bidder for the 2024 Summer Olympics and Paralympics, the next one available after Tokyo's win in the 2020 contest.

If Bach does not find himself heading to the US in 10 years' time for what may very well be the last Games of his Presidency, then a strong US candidate could be all but unassailable in 2028.

David Owen worked for 20 years for the Financial Times in the United States, Canada, France and the UK. He ended his FT career as sports editor after the 2006 World Cup and is now freelancing, including covering the 2008 Beijing Olympics, the 2010 World Cup and London 2012. Owen's Twitter feed can be accessed here.
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