In a move that has seemed inevitable for more than a week, the 2020 Summer Olympics have become the latest sports event—and by far the biggest—to be postponed as a result of the novel coronavirus pandemic.
The summer games had been set to take place from July 24 to Aug. 9 in Tokyo, but Japan’s Prime Minister Shinzo Abe said this morning he has reached an agreement with International Olympic Committee President Thomas Bach to postpone the Olympics for a year, until no later than summer 2021.
The decision deprives NBCUniversal of what execs had long been calling “the media event of the year”—and a key element of its marketing campaign for upcoming streaming service Peacock—while leaving it with a $1.25 billion-plus ad revenue hole for 2020.
The news comes after most sports events around the globe have been shut down by COVID-19’s spread. A week and a half ago, all major American sports leagues suspended play, leaving networks and advertisers scrambling. Several global sports tournaments had already been postponed a year, including soccer’s European Championship (known as Euro 2020) and the Copa America.
But as the IOC dragged its feet on postponing the Olympics, multiple countries said they would not take part in the Tokyo Games if they continued as scheduled, including Canada and Australia.
Postponing the Olympics will have a massive impact on Comcast’s NBCUniversal, which began marketing the event back in 2018. On March 3, the company said it had surpassed $1.25 billion in Tokyo Olympics ad sales—a new ad revenue record for the games—and had sold out 90% of its national ad inventory for the Summer Games, along with its Tokyo Paralympics ad inventory.
Discovery Inc., which has Olympics rights through 2024 in several European countries via Eurosport, will also feel a major ad revenue pinch.
However, both NBCUniversal and Discovery previously said they had purchased insurance policies and will be covered in the event the Olympics are canceled.
“Should there be some disruption, as others have said, we anticipate these kinds of things in big contract language,” Comcast CEO and chairman Brian Roberts said at Morgan Stanley conference in San Francisco on March 3. “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. But again, we’re optimistic the Olympics are going to happen.”
Discovery execs told investors on February’s earnings call that they had also taken out insurance long ago. “You should rest assured that it’s not going to have any adverse impact on our financials,” CFO Gunnar Wiedenfels said.
For NBCUniversal, the Olympics’ postponement has a significant impact beyond ad revenue and schedule holes. The Tokyo Games were going to be the centerpiece of NBCUniversal’s marketing plan for Peacock, which is set to debut nationally on July 15, just a week before the Olympics were going to debut.
At its Peacock investors day in January, NBCU execs said the streaming service’s offerings would include three daily live programs focused on the 2020 Olympics. The company was also expected to promote Peacock heavily through its Games coverage.
As recently as March 17, the IOC had continued to publicly reiterate its support of holding the Summer Olympics as planned, saying that it “remains fully committed to the Olympic Games Tokyo 2020” and “there is no need for any drastic decisions at this stage.”
But on Sunday, as COVID-19 continued to spread and a growing number of sports organizations—including USA Swimming and USA Track & Field—called for the Summer Olympics to be delayed, the IOC released a new statement. It said it would “step up its scenario-planning” for the Games, with a decision expected within four weeks, but reiterated “cancellation is not on the agenda.”