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Despite ratings woes, Tokyo Olympics will be profitable for NBCUniversal

Meg James, Los Angeles Times on

Published in Business News

During the earnings call, Shell alluded to the results of Thursday's gymnastics competition. An emerging American star from Minnesota, Sunisa Lee, won the gold medal for the women's all-round competition.

Shell said he hoped Lee's performance, which was covered live by CNBC, also would score ratings for NBC in prime time.

NBCUniversal is paying nearly $1.3 billion for the rights to broadcast the Tokyo Games, part of a long-term contract extension the company negotiated in 2014. At that time, NBCUniversal was intent on freezing out TV competitors that might be interested in bidding against NBCUniversal, which has broadcast the Olympics exclusively since CBS televised the Winter Olympics from Nagano, Japan, in 1998.

The current rights agreement, which covers TV and digital platforms, runs through the 2032 Games.

Overall, prime-time ratings for the Tokyo Olympics on NBC are down nearly 50% compared with the 2016 Olympics in Rio de Janeiro, according to Nielsen data. But there was less competition for viewers five years ago, and Brazil has a much more compatible time zone — one hour ahead of East Coast time.

In contrast, Tokyo is 13 hours ahead of New York and 16 hours ahead of Los Angeles.

"The online side of the business is helping to offset the challenges in traditional TV," Heger said.

The first night of competition on Saturday averaged 15.9 million viewers, down 32% from the comparable night of the Rio Summer Games in 2016. NBC's audience rose to 20 million viewers on Sunday, which was down 36% from five years ago. Monday's competition scored 16.8 million viewers, off 46% from the 31.5 million who watched on the comparable night in 2016.

The company stumbled by building much of its marketing campaign around star gymnast Simone Biles, who dominated the 2016 Rio Olympics but bowed out of the Tokyo competitions this week, citing the intense pressure and her mental health.

 

But the departure of Biles made room for Lee to shine.

Overall, Comcast had a strong second quarter, beating Wall Street's expectations.

The company gained 354,000 broadband internet subscribers. The company's broadband and cable TV business provides nearly three-quarters of the company's profits.

"Comcast's broadband subscriber growth rate remains stratospheric, at 6.7% year-over-year," telecommunications analyst Craig Moffett wrote in a Thursday morning report.

For the quarter that ended June 30, Comcast generated $28.5 billion in revenue, up from $23.7 billion during the pandemic-hammered second quarter of 2020.

The company's adjusted net income increased 24.3% to $3.9 billion.

NBCUniversal posted nearly $8 billion in revenue for the quarter, an increase of 39% from the year-ago period when theme parks and movie theaters were shut down and live sporting events were canceled.

NBCUniversal's adjusted earnings before interest, taxes, depreciation and amortization, a metric used to measure profitability, increased 12.5% to $1.6 billion, which included financial losses at Peacock.

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