The demise of Quokka Sports will have no major effect on NBC's online coverage of the 2002 Olympics, a network spokesman said last week. San Francisco-based Quokka had terminated most of its staff in preparation for a bankruptcy filing.
The company, a joint-venture partner with NBC Olympics Inc., produced much of NBC's Web coverage of the Sydney Olympic Games last year and was on board to play a substantial role in next year's games in Salt Lake City. The Salt Lake Organizing Committee will take over interim production until a new partner can be found to replace Quokka.
"There are a number of groups we are in discussions with that have a great interest in the Olympics," said NBC Sports spokesman Mike McCarley.
In Sydney, NBC heavily promoted its online Olympics coverage, frequently encouraging viewers to sample in-depth coverage on the Web. McCarley said the network is re-evaluating its online plan for 2002.
Under a joint-venture agreement signed in 1999, Quokka handled the bulk of online production for NBC's Olympic coverage. Last month, the companies agreed to terminate the deal on May 1 unless Quokka could find additional funding.
Although the Sydney Web site generated nearly 6 million unique visitors, it failed to turn a profit. Advertisers included General Motors, VISA, sports-apparel maker Adidas and brewer Anheuser-Busch. Most of the sponsorships, however, were bundled with television buys. NBC-TV's 2000 Olympic audience was estimated at about 180 million.
"Quokka was a third-party producer, and, as such, they shared revenue with NBC," said Paul Palumbo, an industry analyst with DFC Intelligence, Salinas, Calif. "As in any video distribution business, the middle guy gets squeezed: Production costs are high, and profits are skimpy."
Quokka reported revenues of $47.2 million for fiscal 2000, but the company spent nearly $45 million on production costs alone, much of that associated with production of the Sydney site. Net losses for the year totaled $280 million.
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