Two days ago, the 2020 Tokyo Olympics were postponed. The decision surprised no one given the coronavirus, even if the numbers in cases in Japan have slowed down recently. With all the travel and tourism involved, it would’ve led to another serious outbreak of the virus. As a result, the Olympics will move to 2021. A new date hasn’t been announced yet. Tourism, hotels, and airlines will take a hit from the reasonable decision. As for advertisers, $1.2 billion in ad sales is now in question.
$1.25 Billion in Ad Sales
According to Deadline, Comcast’s NBCUniversal is now communicating with advertisers on the $1.25 billion in ad sales already sold. It’s a new record for the Olympics. It’s unclear whether Comcast will pay back the advertisers or play their ads next year. In total, $6 billion is usually generated in sponsorship from the Olympics. Now, a large chunk of that sum is at stake. Fun fact: that $6 billion doubles the previous summer games in sponsorship revenue.
In a statement, an NBCUniveral issued the following:
“NBCUniversal is actively working with our advertising partners to navigate this postponement, and we’re exploring all options to best serve their brands and our consumers this year, and into 2021.”
NBC would’ve aired a total of 7,000 hours of the Olympics on their platforms this summer. Imagine all the time for ads.
Money Up For Grabs
It’s unclear how much of the $1.25 billion in sales Comcast already has in their pocket. According to James McDonald from the London-based advertising consultant WARC, all of that money is up for grabs right now:
“With the fallout that we are seeing globally from the spread of this disease, the business pressure is generally immensely far higher than we’ve seen in previous times.”
Advertisers will see what they can recoup right now, says an unnamed source in the ad world:
“All of that money we had tied in, that is something that we can recoup at a time when we need to shore up the ship.’ So the $1.25 billion is all up for grabs. They’ll be trying to see what they can recoup, what will be shifted.”
Ad Sales in Europe
Discovery, Inc., and their subsidiary, Eurosport, are airing the Olympic Games in Europe. Last month, a rep from the company said the financial impact of the delay wouldn’t be catastrophic. Damage is minimal. Discovery, Inc., fully supports the decision to delay the games, as does Comcast. Earlier this month, Comcast CEO Brian Roberts said the company actually planned for the unexpected such as the coronavirus. They have insurance and protections in place. He explained:
“We try to anticipate for big events what might happen so that we’re protected there, and we also have insurance for any expenses we make. So there should be no losses should there not be an Olympics. There wouldn’t be a profit this year.”
Weeks ago, Comcast even began bracing for the cancellation. In their own words:
“The creation and availability of our film and television programming in the United States and globally…including from the cancellation or postponement of sports events, including possibly the Olympics, and the suspension of entertainment content production.”
Right now, Comcast’s business is safe and okay. The overall impact may vary, as they expect, but it depends on the ongoing government measures changing the country right now. The company can’t see the future, so they’re not sure yet how much their products, services, and ads will be affected. In an understatement, it’s going to prove challenging. Stay tuned for more news on the Tokyo Olympics.