Olympic Games broadcasting
It seems that none of Australia’s three commercial free-to-air rivals, Seven Network, Nine and the Ten Network, are yet ready to bid-to-win for the broadcast rights for the Sochi Winter Olympics, just 10 months away, and the Rio 2016 Olympics. It is reported that Seven has offered about the sum paid for the Beijing Games. Nine had a cost-sharing arrangement with Foxtel for the London 2012 Olympics – but lost an estimated $25 million. Australia is the sixth-most valuable territory for Olympic Games broadcast deals after the US, Europe (excluding Italy), Japan, Canada and Italy. All the networks are under extreme financial pressure and their focus is principally on securing sports content within Australia and for full season/full year sports deals, such as football and cricket.
América Móvil, the Mexican telecommunications company controlled by Slim, has been awarded the rights to next year's Winter Games in Sochi and the 2016 Summer Olympics in Rio de Janeiro on media platforms across Latin America. The deal does not include Brazil where rights were sold separately in 2009 to three different media organisations. The company is owned by Mexican magnate Carlos Slim, the world's richest man. Not only is this the first time América Móvil has secured rights, it heralds a new era in rights competition and holding – from telecommunications companies who increasingly see their future profits lying in the development and ownership of content and are rapidly moving into video streaming and television.
For América Móvil, a mobile phone company and not a traditional broadcaster, there is enormous potential via the access to the Olympics, the first being held in South America. Add to that Slim's ownership of the telco sponsor for Rio 2016, Embratel + Claro, and you can be sure to see some innovative 'connectivity' emerging.
Arturo Elias Ayub, Slim's son-in-law and spokesman, told the Mexican newspaper Reforma that the deal gives América Móvil the possibility of re-selling the rights in Latin America and of broadcasting the games on a new television channel in Mexico if Slim's Telmex company gets the rights to it once a new telecommunications reform is signed into law. Slim's Telmex controls 80% of Mexican landlines and 70% of the mobile-phone market. América Móvil is one of the leading providers of cable or satellite TV service in Latin America with 16 million subscribers in 18 countries, except Mexico, where Slim has been trying to get into Television. The television market in Mexico is controlled by Televisa, the world's largest Spanish language broadcaster. Televisa has 70% of the broadcast TV market and more than 45% of cable television.
Securing the Olympic Games' rights allows Slim to expand its presence in Latin American's TV industry but more importantly, it shows his business model's aim is to offer convergence services, which integrate the dissemination of voice, data, sound or pictures through a single network, experts said.
Slim has been ranked the world's richest man four years in a row by Forbes. In the latest annual list, Slim's net worth increased to $73 billion from $69 billion a year earlier.
Slim, a sports fan, made his first foray into soccer ownership last September as his company acquired a 30% stake in Mexico's first division clubs Leon and Pachuca in a bid to break the TV networks' stranglehold on sports broadcasting.
The IOC announced a separate agreement in 2009 for the 2014-2016 broadcast rights in Brazil. In a deal worth $210 million, TV Globo acquired the main rights across all platforms in partnership with Bandeirantes and Rede Record. The IOC signed their biggest single deal two years ago, with NBC agreeing to pay $4.38 billion for the US broadcast rights up until 2020.
The América Móvil deal, understood to be worth more than $100 million, a big increase from the previous quadrennium, takes the amount raised by the International Olympic Committee from broadcasting rights for the 2013-2016 period to an amazing $4 billion-plus – with a few large territories still unsold. This compares with the $3.914 billion raised for the four years culminating with London 2012, itself a 52% advance on the previous quadrennium. So much for the global recession!!!