Why Do Sports Rights Continue To Go Up While Viewership On Games Goes Down?

Broadcast rights for most sporting events continue to soar, despite the fact that viewership continues to decline. This trend has been exacerbated by the coronavirus pandemic, which has made attendance either limited or non-existent for many televised events. It’s clear that viewers find live games with no fans in the stands less compelling than those with avid fans in the background.

Case in point is the 2022 Winter Olympics, which was a disaster on a number of fronts, many related to the coronavirus pandemic, with the lack of spectators in the stands likely at the root of the Beijing Games posting the lowest ratings in Olympic history. The time zone didn’t help either, with Beijing 13 hours ahead of EST.

An average of 11.4 million viewers in aggregate were tallied across NBC’s networks and its online service Peacock during prime-time, a 42% decline from the Pyeongchang South Korea Winter Games in 2018. The 2021 Summer Olympics posted the same rate of decline as this year’s Winter Games, dropping 42% in its 17 days of events compared to the 2016 games which were held in Rio de Janeiro, Brazil.

The 2022 games also had a negative impact on the Chinese economy, with billions spent on infrastructure like stadiums, new hotels and restaurants. Chinese President Xi Jinping said way back in 2015 that they were going to create a new tourism industry in the country. “It will inspire over 300 million Chinese to participate in winter sports if we win, which will contribute greatly to the development of the international Olympic cause,” he said. 

The broadcast sports model is clearly broken—the rights fees for the Winter Games in 2022 (part of a much larger contract) were estimated to be up 15% from what they paid for the 2018 games. Still, management at Comcast
CCZ
Corp.’s NBC Universal tried to put a positive spin on bidding on the games—likely to appease investors given that the company signed a pact in 2014 locking in the Olympic rights through 2032 for $7.75 billion.

NBC Sports Group Chairman Pete Bevacqua told a reporter that viewing levels for the Beijing game were within what the networks sales and research departments estimated. However, he conceded that the pandemic fueled the lackluster ratings, pointing to difficulties such as few spectators, athletes wearing masks, no family and friends in the stands and “very harsh protocols in China” related to COVID-19.

This led NBC to keep its announcing team in the U.S. rather than in Beijing. “We had 1,600 people in Stamford [Connecticut] and 600 people in Beijing. Normally that would be flipped for us,” he said. He noted that, “it was an absolute home run for Peacock.” However, he refused to comment on whether or not the games turned a profit.

Comcast reported $1.8 billion in revenue from the 2021 Tokyo Summer Olympics, despite the fact that the games had been postponed for the first time in history (they were canceled during World War 1 (1916) and World War II (1940 and 1944)). Revenue for the Beijing games are expected to be much lower.