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Scandal is gold for NBC

The stars were aligned for NBC's Olympic coverage last week. Consider the pluses: a domestic venue, great weather, brilliant performances by the U.S. Olympic team. And to top it off, a controversy erupted in the figure-skating competition, the most popular event category among U.S. viewers.

It all added up to some boffo ratings for the first six nights of prime time coverage. The network averaged a 19.2 rating and 31 share, 14% higher than for the first seven nights of the Nagano winter games on CBS in 1998.

The controversy, involving a French skating judge who was suspended last Friday after allegations that she threw her deciding vote to the Russians in the pairs skating competition, had to help NBC ratings.

The network certainly thought so. It barraged reporters all week long with transcripts of how its skating commentators reacted to the unfolding scandal. Last Friday, the Canadian pair was awarded a gold medal, too. (Although NBC guards its Olympics coverage rights, it allowed news networks to pick up Friday press conferences regarding the controversy.)

NBC didn't pull any punches on Monday, Feb. 11, in declaring that something was amiss. "How do you win the performance, win the crowd, win the night and lose the medal?" opined skating commentator Scott Hamilton. "I'm embarrassed for our sport," added Sandra Bezic, who was in the anchor booth with Hamilton. (To its credit, NBC's Today
show later presented Chicago Tribune
sports reporter Phil Hersch, who gently suggested that the public was reacting more to Hamilton and Bezic's outrage than to the technical differences between the Russian and Canadian performances.)

NBC was caught up in controversy of its own. For Wednesday night's coverage, the network shifted all national commercials out of the first half-hour (8 to 8:30 p.m. ET), and local spots were shown instead. That basically eliminates from ratings the lower-viewed first half-hour because, on a national basis, Nielsen measures only content with national ads in it.

As a result, NBC's Nielsen rating for the night got a half-point boost to 17.5. Competitors cried foul. "It's an absolute manipulation of the ratings," said one executive at another network.

NBC was also manipulating the back end of each night's telecast, deciding the next day, depending on the rating, whether to cut it off when the last national commercial aired or when the broadcast ended. That practice is more common and happens routinely in late night and early morning. But researchers said it was unusual with Olympic-type events.

The odd thing is that competitors say NBC will easily meet ratings guarantees, said to be in the 17-to-17.3 range, even without such maneuvers (which it limits to nights when no figure skating appears).

Nielsen said that what NBC is doing is perfectly legit, and the network said several months ago it intended to "sustain coverage" of the opening half-hour on several nights when no figure skating would be featured.

All in all, it was a happy week for NBC. Its Olympic gambit was paying off in spades; some even wondered whether the network had undersold the games, despite a record $720 million in ad sales. Quite a comparison with News Corp., which last week announced a $909 million combined write-off for three of its current major-league sports contracts: football, baseball and NASCAR.

NBC's cable networks are seeing ratings surges as well. CNBC, which is carrying a lot of men's hockey, averaged a 0.6 household rating for the first five days, a 50% increase over its average rating during the same period a year ago. MSNBC's coverage of curling, biathlon and women's hockey spiked ratings to a 1.2 from a 0.3 average. CNBC's rating, in particular, should only get better as the American men's hockey games come on.

Not everyone is seeing the extra coverage, however. NBC looked for a five- to seven-cent year-round surcharge from operators to offset the cost of Olympic rights. Virtually all cable and DBS operators paid up, but some didn't. NBC says systems serving about 1 million subscribers didn't sign onto the deal. Their customers are getting a substitute feed of old news features.

Other cable networks are certainly feeling the pinch of competition. Lifetime TV research chief Tim Brooks said that, on average, viewership of the basic cable networks was down about 10% last week, with general-entertainment networks suffering the worst. "It's not so much competition for programming, but competition for marketing," he said. "Promos get lost in all the noise."