Foxtel & Nine Face Millions In Olympic Losses

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Big IT and consumer electronics vendors, who have traditionally stumped up millions in Olympics sponsorship dollars, are now being urged to buy spot market spots as both Foxtel and the Nine Network face losing more than $40M million covering this month’s upcoming London Olympics.During the past six months, Samsung has spent millions linking potential Olympic Gold Medallist James Magnussen with their brand prior to the Games as opposed to spending millions on promoting the Australian swimmer dubbed “The Missile” during the Games.

Panasonic Australia and Acer have saved their global sponsorship for when the games start on July 24th.

Among the 11 worldwide sponsors are McDonalds, Coca-Cola, Samsung, Acer, VISA, P&G, GE, DOW, Panasonic, Atos and Omega.

Since the Sydney Games, global sponsorship revenues have grown from $2.3bn to $4.9bn for the Olympic organisers.

Broadcast revenues for the four years up to and including the London Olympics are up 40 per cent on the previous four-year period to nearly $6 Billion dollars.

Combined, Foxtel and the Nine Network forked out $120M for the rights to cover the Olympic Games in London and next year’s Winter Games.Now both organisations are facing losses of over $40 Million due to rising production costs and a lack of interest from big brand consumer electronics sponsors, who are now being urged to advertise during the games by buying advertising spots at a big discount off the official Olympic rate card rates.

The Australian Media section predicts Nine would fall $10m-$15m short of its advertising revenue target and it had failed to sell all its planned sponsorship packages.

They also claim that Foxtel, which is 25 per cent owned by News Limited, will incur a loss on its Olympics coverage.

The lack of interest in the Olympics could bring down the cost of future sponsorship deals – including the upcoming NRL rights which are currently being negotiated – say observers.

Citigroup equity analyst Justin Diddams issued a stark warning re the NRL sponsorship recently when he predicted failure to win the rights could lock either incumbent broadcaster Nine or Ten permanently in third place in the ratings battle.

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