One senior executive said " In the past when consumers were looking at buying a new flat screen TV for the first time there was a lot of interest in sporting events such as the Olympics but that was then and it is not the case now. Local sporting events such as soccer, AFL Rugby Union and NRL deliver better and cheaper results over a longer period of time and it is often a cheaper marketing solution".
At the weekend the Australian newspaper revealed that all three commercial free-to-air networks have pulled out of bidding for the next Olympics which will be held in Brazil.
The Seven Network has withdrawn from the bidding process in recent weeks, after the International Olympic Committee called on the network to raise its offer, leaving their final destination in limbo. Channel Nine who delivered the London Olympics is believed to have lost $25M covering the two week event.
Seven is believed to have lobbed in a lowball bid which was significantly under what Nine bid for the London games.
The Australian claims that the TV networks determined the losses did not justify the financial outlay required, given current pressures to rein in costs during an advertising downturn.
Nine picked up the London Olympics and a Winter Olympics package for $120 million, the network contributed $72m, with Foxtel picking up the remaining $48m.
Media understands key administrators at the Olympic movement have been taken aback by the lack of interest in Australia as they were expecting to get a lift in fees instead of a reduction.