TV Ratings Forcing NBC To Haggle With Sponsors

Since the opening ceremony of the Olympics last week, NBC has been busy negotiating with anxious advertisers, offering ways to make up for the games’ steep drop in viewers, people familiar with the matter say, reports Bloomberg.

Haggling over “make-goods” isn’t unusual in TV. But the discussions show that NBC’s ambitious Olympics effort from Tokyo is drawing a smaller audience than the broadcaster or advertisers expected. With the coverage nearing its halfway point, average nightly viewership through Tuesday was down 42% from the 2016 Summer Games across all of NBC’s outlets.

A decline through the second week threatens to eat into the revenue that NBCUniversal counts on to cover expenses and turn a profit from the games. The company, part of Comcast Corp., sold more than $1.25 billion in commercials for this year’s Olympics, a record. It’s paying about $1.1 billion for the broadcast rights.

The decline from the 2016 Games in Rio de Janeiro partly reflects the long-running drop in traditional TV audiences, which have been lured away by streaming. And while sports ratings have bounced back this year from 2020, many events are down from pre-pandemic levels.

Meanwhile, some fans have said on social media they are confused about where to find the programming, which airs across two broadcast channels, six cable channels and multiple digital platforms.

While the ratings are down from 2016, what matters most to advertisers is what NBC promised them. Ad deals are based on either the number of viewers or “brand lift,” a term for how audiences perceive a brand compared with competitors. Each deal with advertisers is different.

“We know our platform will deliver for advertisers in delivery and impact,” Mark Marshall, NBCUniversal’s president of advertising and partnerships, said in a statement. “Our teams are speaking to our partners every single day to ensure we help them achieve their goals throughout the games.”

Networks plan for the possibility of make-goods. NBC set aside extra advertising inventory before the Olympics began in case ratings were lower than expected and the company was forced to give sponsors additional commercial time to meet its obligations.

In a call with investors Thursday, NBCUniversal Chief Executive Officer Jeff Shell said he expects to turn a profit from the games.

The network still has time to make up for the early ratings decline. The Olympics run until Aug. 8.