), NBC Universal maintains its Olympics telecast rights in the U.S.
till 2032 through a 12-year contract extension with the
International Olympic Committee (IOC). NBC Universal will gain
rights to six Winter and Summer Olympic Games for a record $7.75
billion (inclusive of $100 million for promoting the games from
2015 to 2021).
The deal entails a payment of $2.5 billion for the rights to 2022
and 2024 Olympic Games. The rights to the 2026 and 2028 games will
cost $2.55 billion and for the same for 2030 and 2032 stands at
$2.6 billion, thus reflecting an average 15% rise in price with
In 2011, NBC Universal gained the U.S. telecast rights for the
winter games held in 2014 and 2018 and the summer games of 2016 and
2020 for $4.38 billion. The company outbid rivals -- ABC and ESPN
networks, controlled by
Walt Disney Co.
)-owned Fox Network -- for the rights..
The agreement with the IOC will allow NBC Universal to broadcast
the games on media platforms like television, subscription TV,
Internet and mobile devices. Moreover, it will enhance the
company's video streaming services and safeguard its position
against low-cost video streaming companies like
) and Hulu.
Moreover, Comcast has decided to acquire
Time Warner Cable Inc.
). The deal is currently going through regulatory scrutiny. If U.S.
regulators approve the deal then Comcast will become a cable TV
behemoth with 30 million subscribers. This will further boost the
profitability of NBC Universal.
Comcast exited the first quarter of 2014 with nearly $5.4 billion
cash and $44.6 billion debt. Thus, a payment of $7.75 billion may
further pressurize the company's cash position.
Hence, it is to be seen whether the Olympics distribution rights
will prove profitable to the company in the long run.
Currently, Comcast carries a Zacks Rank #3 (Hold).
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