NBC preparing make goods to advertisers for lower Rio Olympics viewership

NBC’s ratings for the Rio Summer Olympics have been lower than expected to this point, especially compared to the numbers the network generated four years ago for the London Games. Perhaps interest in Michael Phelps’ historic run and the performance of the U.S. women’s gymnastics team will buoy those numbers, but there’s also a possibility that viewership could wane.

NBC Sports chairman Mark Lazarus insists there’s nothing to see here and that advertisers are happy. The network has sold another $30 million in ad time since the Rio Games began. But NBC is apparently also preparing to make good with the advertisers who paid a total of $1.2 million for spots to be played during the Olympics.

According to Bloomberg’s Gerry Smith, NBC intends to make up for any shortfall in TV ratings for the Rio Games by providing free extra commercial time to advertisers who paid rates according to viewership guarantees. The network promised its ad partners a prime-time rating of 18, but NBC has averaged a mark of 15.6 during prime time.

“We build in inventory to make sure we deliver what we promised them,” Lazarus told reporters on a conference call. “We will leave the Olympic games with every advertiser getting exactly what we agreed upon with them.”

Going into Wednesday night, the Rio Games were averaging 28.6 million viewers and a 15.6 household rating. But that overall audience number is 10 million less with a two-point decrease in rating points than what NBC drew in 2012 for the London Olympics.

NBC is also touting the increased viewership on cable and streaming, insisting that makes up some of the difference in lower TV viewership. Advertisers may not be ready to buy that argument, however, seeking more live programming in prime-time.

ESPN faced a similar problem with the huge ratings dip on New Year’s Eve for the College Football Playoff. In that instance, the network had a reported $20 million in make goods with its ad partners, and likely compensated with free advertising time on other programming such as the NFL Playoffs.

With another week or so in the Rio Games, NBC isn’t yet faced with make goods on other sports programming. But with TV and digital rights to the Olympics through 2032, the network may have plenty to think about in terms of what’s promised to advertisers in future telecasts.

[Bloomberg]