Every year we are subjected to stories in the news marveling at the exorbitant and ever-climbing rates charged for television advertising during the Super Bowl. Earlier this year, 30 second ad spots during Super Bowl XLIII were going for the princely sum of $3 million. With all that money floating around, surely broadcaster NBC is raking in money hand over fist, right?
Well, maybe not. NBC’s parent company, General Electric, has released the financials relating to their coverage and broadcast of Super Bowl XLIII, and claims that they — get this — lost $45 million dollars on the deal. Not surprisingly, some observers aren’t buying it.
NBC’s statement reveals that the network pulled in a record $206 million in advertising sales, despite the recession and declining consumer spending. So how, exactly, does a network suddenly start losing money on a formerly profitable television event like the Super Bowl? According to the NEW YORK POST, tricky accounting might be at play:
It’s no secret the broadcast networks lose money on their football deals because of the huge rights fees the NFL extracts. TV execs consider football a loss leader that brings in a reliable flow of viewers. But industry insiders are suspicious that NBC actually lost money on the Super Bowl, which commands the highest ad rates in television. Rather, some suggest GE is writing off a chunk of NBC’s losses on its NFL contract, attributing them to the Super Bowl.In reality, the Super Bowl doesn’t usually come with a separate rights fee or contract. The game is just part of the multi-year package that a network negotiates with the league. The major networks rarely, if ever, break out the financial results for the Super Bowl.
The article also speculates that NBC may be using these numbers to protest the exorbitant
ransom rights fees that networks must pay for the right to broadcast NFL games. Either that or it’s the first step towards a government bailout of our precious sports broadcasting industry, with Vice President Joe Biden replacing the retiring John Madden in the role of mush-mouthed analyst.