NBC's Retreat from Moscow

The network gives up its Olympic gold—$70 million worth

Just thinking about the summer of 1980 used to make NBC proud as a peacock. For 17 days beginning July 18, millions of Americans would be glued to their television sets, watching NBC'S coverage of the Moscow Olympics. The figures were dazzling: 1,210 commercial minutes spread over 152% hours of programming, advertising revenues of $170 million. What is more, a promotional blitz during the Games could give the network's fall lineup a rousing sendoff. Surveying his prospects a year ago, NBC President Fred Silverman predicted that the network would be in a "leadership position by Christmas of 1980."

But last week NBC was more sparrow than peacock. Edgar H. Griffiths, chairman of parent company RCA, told stockholders at then-annual meeting that NBC would not be televising the Games "because the U.S. team is not scheduled to participate and because the President of the United States has so desired this to be the stance we take." The decision was expected, but it was sobering nonetheless. All told, the cancellation could cost NBC up to $70 million in lost profits and out-of-pocket expenses.

TV sports junkies are sure to be demoralized. They will have to settle for snippets on regular news programs, although ABC is likely to beef up its Moscow bureau so that it can give additional Olympic coverage. There is only an outside chance that a cable-television company could try to buy the rights if the Soviets formally charge NBC with breaching its contract.

The blow to NBC was softened somewhat by the insurance purchased from Lloyd's of London four years ago against just such an eventuality. The company is covered for 90% of the $87 million it agreed to pay the Soviet Union and the International Olympic Committee for television rights and technical faculties. Since it has ponied up $70 million so far, this means it should recoup $63 million. Uninsured losses include $30 million spent on training of personnel, travel to Moscow and promotion; $1 million paid to a West German middleman, Lothar Bock, for helping NBC win the broadcast rights; and $4 million worth of insurance premiums. Ad profits for the network and its five owned and operated stations will be $20 million to $30 million less than they would have been with the Olympics. NBC expects to recover the $4 million worth of recording gear, video machinery and cameras that it already sent to Moscow.

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