Is USOC really close to channeling its TV ambitions?
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Peter Ueberroth sometimes asks people at the U.S. Olympic Committee what channel the ‘USOC Network’ is on.
It’s meant as a joke. Sort of.
The point behind the question is an attempt to determine the end of a gestation period that now is 36 months and counting since former USOC chairman Ueberroth planted the seed of starting a network he wanted to begin broadcasting before the 2010 Winter Olympics.
The new USOC chief executive, Stephanie Streeter, answered that question before a recent meeting of U.S. sports federation CEOs by holding her thumb and a finger about a half-inch apart and saying, ‘We’re this close,’ according to people who witnessed it.
Streeter also used the word ‘June’ to emphasize how close the USOC was to making a significant announcement, then sought leeway by saying, in effect, ‘be patient.’
Which left some of the sports federation chiefs rolling their eyes, because they have heard this several times before from other USOC officials, and the USOC continues to deny them any specifics about the network with the shopworn defense of not wanting to jeopardize negotiations.
To those who wonder whether there ever will be such a network, the best answer would be: Steve Greenberg of the low-profile (no website), high-reputation boutique investment firm Allen & Company.
Greenberg, the former Major League baseball deputy commissioner who is point man on financing for the USOC network, was a founder of Classic Sports Network (sold to ESPN and turned into the highly profitable ESPN Classic) and College Sports TV (still a relative fledgling after being sold to CBS). He knows how to do deals like this.
And the reason(s) to think there won’t? Recession; lack of quality programming (much of the best international and national Olympics-related sports rights are owned by NBC subsidiary Universal Sports); and lack of a complete domestic buy-in, as six major U.S. federations (track, swimming, gymnastics, skiing, soccer, hockey) have not signed away their TV rights to the USOC.
Attempts to get Greenberg to comment on the state of the negotiations were unsuccessful.
USOC chief operating officer Norm Bellingham, the staff member in charge of getting a network underway, won’t talk about this stuff either, but there are plenty of people outside the USOC willing to volunteer information sub rosa.
A couple sources told me the financing idea is to get cable operators like Comcast as an equity partners.
If you are a Comcast, though, you have to wonder whether that equity ever will be worth anything — which makes it likely that outside investors won’t pay enough to prevent the USOC from having substantial financial exposure.
That exposure makes many national sports federation leaders worry about having their funding cut by the what the USOC spends on the network and asking (but getting no USOC response) why it wouldn’t have been better to do a deal with less exposure (more on that later).
Yes, an infant network like the one the USOC envisions can survive as little more than a mom-and-pop operation for one year — or several. ESPN and the Golf Channel prove that.
The USOC idea is to start out by using some archival footage, some fitness-oriented programming it produces and some live coverage of events, the last of which could involve substantial production costs. (And that programming will be hard-pressed to find even a niche audience.)
Although some of this can be justified as an investment in keeping the U.S. Olympic brand visible and providing enhanced sponsor opportunities between Olympics, the question is, ‘At what cost?’
Which leaves the big question, with a few permutations: Why didn’t the USOC simply go into partnership with Universal, both before (when it was known as WCSN) and after it was bought by NBC, which has been the Olympic rights-holder in the United States since 2000 and will be until at least 2012? The USOC exposure would have been significantly less that way.
Some answers about why it hasn’t happened since NBC bought Universal:
— Some USOC officials wanted a bigger equity stake than what NBC was offering.
— NBC was angry that the USOC was going off on its own to start a network. The USOC was angry that NBC made the defensive play to buy WCSN — which, even rebranded as Universal, is not yet making money despite providing wide-ranging, quality live coverage (especially on the Internet and now also on some cable systems, including Comcast) of major events like the world championships in alpine skiing, swimming, and track and field.
At this point, you also have to wonder why the USOC doesn’t hold off on the network until it sees who gets U.S. broadcast rights for 2014 and 2016, which the IOC likely will award early next year.
If it is NBC, the USOC would be foolish not to throw in with the partner that will have been enriching its coffers (through the 12.75% USOC share of U.S. rights) for 16 straight years.
Of course, maybe it will hold off. After all, when Streeter mentioned June, she didn’t say what year.
— Philip Hersh
Top photo: Steve Greenberg, son of Hall of Famer Hank, as 1970 Yale baseball captain. Credit: Yale sports information. Lower image: Universal Sports logo
