NBC Expects Ad Revenue Increase for Winter Olympics

By Alexandra Bruell Features Dow Jones Newswires

Comcast Corp.'s NBCUniversal spent billions of dollars on multiyear rights to air the Super Bowl and Winter Olympics, banking on advertisers to pay a premium for commercials in live sporting events.

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The TV network says the strategy will pay off in 2018, when NBC airs coverage for both events days apart.

"Sales for both the Super Bowl, as well as the 2018 Winter Olympic Games, are brisk, and we expect to reach revenue targets for both of these events," said Dan Lovinger, executive vice president of ad sales and marketing at NBC Sports Group, during a press call Monday.

NBC is anticipating a low double-digit percentage increase in ad revenue from the Olympics, compared with the Winter Games that the network aired from Sochi, Russia, in 2014, he said. The network generated more than $800 million from the Sochi Games, according to an NBC spokesman.

The Opening Ceremony is "heavily sold," Mr. Lovinger said, with "a handful of opportunities remaining."

The Super Bowl kicks off Feb. 4 in Minneapolis, while the Winter Games take place in Pyeongchang, South Korea, over the course of about two weeks starting Feb. 9.

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NBC anticipates that it will generate around $350 million in revenue from the Super Bowl, with 30-second ad units going for around $5 million, he said. While that's a coveted amount for any TV network, it isn't an increase over the roughly $5 million price tag for commercials in this year's game on Fox.

The average price of a 30-second Super Bowl ad doubled in a decade, reaching $4.8 million in 2016, according to Kantar Media.

For the Olympics, the network is shifting from guaranteeing advertisers reach based on number of households -- a common TV metric -- to guaranteeing the number of viewers over the age of two, in order to better capture viewing across digital and traditional TV devices.

Advertisers for years have paid up for the massive reach of live sports, especially big, global events like the Olympics. But advertisers this year have to take into account changing viewing habits and concerns around heightened tensions between South Korea and North Korea, according to some ad buyers.

While some buyers said clients had expressed hesitation because of potential security concerns, others said it was unlikely to significantly impact ad sales. "There were similar concerns around Rio in 2016, but that did not seem to turn off advertisers," said one buyer.

NBC has one unique occurrence going for it: The network, which only has rights to the Super Bowl every third year, is in a unique position to package the Olympics with the football championship for advertisers in 2018.

About 25% of NBC's total revenue from the Super Bowl and Olympics will come from advertisers that are buying spots in both events, said Mr. Lovinger.

Write to Alexandra Bruell at alexandra.bruell@wsj.com

(END) Dow Jones Newswires

October 30, 2017 15:23 ET (19:23 GMT)