The company approached the London Olympics, which officially opened Friday, expecting to lose about $200 million on its coverage. But ratings for the Summer Games have been much higher than expected, which should allow the company to escape a huge financial loss.
"We are off to a very, very successful start," NBCUniversal Chief Executive Steve Burke said Wednesday morning during Comcast's second-quarter earnings call. "We think London is going to be right around break-even. We are way ahead of where we thought we would be."
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NBCUniversal is paying $1.18 billion to the International Olympics Committee for the exclusive television rights in the U.S., and is broadcasting the events on a multitude of channels including NBC, MSNBC, Telemundo, the NBC Sports Network and on the Internet. The company is incurring more than $100 million in production costs.
Despite a chorus of complaints about the network's decision to delay broadcast of high-profile sports events until prime time, hours after the events are over, the television ratings have been dramatically higher than expected.
Ratings are up about 9% compared with the Beijing Olympics in 2008, Burke said. The NBC network has been drawing more than 30 million viewers in prime time, a spectacular feat in an age of fragmented media and dwindling audiences.
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Audience interest has helped fuel advertising sales.
"Even before the Olympics started this year, we were over $100 million ahead of our ad sales goal," Burke told analysts on the call. "So there was a lot of demand I think for the time and we booked over $100 million more than our plan and more than we ever had booked before. Now that the Olympics have started, the second positive ... is in ratings, which are way up versus forecast."
Late last week, Comcast Chief Executive Brian Roberts said the company had sold more $1.2 billion in advertising time for the Olympics on the various television networks, Internet sites and local NBC television stations.
On Wednesday, during the earnings call, Chief Financial Officer Michael Angelakis cautioned that while the results were better than expected, the company had already factored in a financial loss on the Games.
That means on the books, the London Olympics still will result in a financial loss for the company.
"We will have a negative impact in free cash flow in the third quarter," Angelakis said.
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