Profit still expected
The The General Electric Co. division, which encompasses the NBC broadcast network, various cable properties and the Universal movie studio, struggled to juice big buzz from its coverage of the Winter Olympic Games in Turin in February. NBC Universal attached a $70 million loss in the quarter to the games, but said over the course year the games would make the company a slight profit. The Winter Games drew revenue of $684 million.
NBC spent close to $600 million for rights to the Winter Olympics. Both the failure of American athletes to translate pre-game hype into medals and the aggressive counter-programming of rival networks drove down audience ratings. On a conference call with analysts, General Electric CEO Jeffrey Immelt explained that the network charges affiliates a non-refundable fee payable every quarter to help pay for the biannual sporting event.
Speaking on an analysts' call this morning, Mr. Immelt said he had high hopes for the next big Olympic event, the Summer Games in China in 2008.
All eyes on Beijing
"We got about $60 million of business in Torino," he said. "But the big one here is Beijing. We have a funnel of about $1.2 billion. I expect us to get maybe $800 million to a billion out of that. So I still like the Olympics. I think Torino was a tough venue, a tough set of dynamics. I think Beijing is going to be a whole other story. Not only from a network standpoint in terms of viewer interest but also from an infrastructure standpoint."
Offering guidance on the second quarter, Keith Sherin, senior VP-finance and chief financial officer, said the revenue estimate for NBC would be flat. Overall, GE's first-quarter profit was up 9% at $4.3 billion, from $3.96 billion in the comparable period.