Mar 24, 2020 - Economy

Olympics postponement throws more than $1 billion in advertising into limbo

Illustration of the coronavirus arranged as the Olympic rings

Illustration: Aïda Amer/Axios

The postponement of the 2020 Olympic Games to next year creates problems for advertisers, who could now potentially be facing a more crowded media calendar.

What they're saying: "Cancelled is actually the easier scenario than postponed because it's a definitive yes or no kind of thing," says Jon Swallen, CRO of the media division at Kantar, an advertising analytics company.

  • "The biggest impact from an advertising perspective would probably go to the network selling the airtime," says Swallen.

NBCUniversal says it's already sold a record $1.25 billion in national ads around the 2020 Tokyo games, surpassing its previous record of $1.2 billion in ad sales during the 2016 games in Rio de Janeiro.

  • NBCUniversal and its parent Comcast say they have insurance built into its contracts for lost expenses. "There should be no losses should there not be an Olympics, just wouldn’t be a profit this year," Comcast CEO Brian Roberts has said.

The big problem: "It's unlikely NBCU can replace ads against programming at the same prices they were selling it for originally for the Olympics, which is a potential revenue hit for them," says Swallen.

Don't forget: There's a huge opportunity cost for marketers needing to reallocate all of their lost sports ad placements.

  • "There's going to be a spike in available inventory as cancellations come in," says Swallen. It's going to be be better economics for those that come back in and buy earlier."

Go deeper: How the coronavirus-driven sports outage impacts TV and advertising

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