June 10, 2011 7:42 PM
Cahill Gordon Helps NBC Snag $4.4 Billion Olympic TV Rights Deal
Posted by Brian Baxter
NBC Universal held on to its Olympic crown this week with a successful $4.38 billion bid to the International Olympic Committee to televise the next four winter and summer games through 2020.
Advising the New York-based network was a team from longtime outside counsel Cahill Gordon & Reindel led by corporate partner James Clark, a member of the firm's executive committee.
Reached by phone Friday, Clark says he's been working for NBC on Olympic-related deals since 1986. Since then he's handled six different contract negotiations for the company covering 16 different Olympic games.
Clark's work on these contracts started right after the ill-fated 1980 Summer Olympics in Moscow. NBC negotiated the rights to televise those games in-house, but after the Soviet Union invaded Afghanistan, former President Jimmy Carter signed an executive order banning U.S. participation in the event.
The order prevented U.S. companies from sending any money or equipment to Moscow for the games, which NBC was forbidden from broadcasting due to the Olympic boycott. When the time came to bid for the 1988 Summer Olympics in Seoul, NBC turned to its regular outside counsel at Cahill Gordon for the negotiations.
"They used to have only a five-page agreement for whoever won the Olympic games, but by the time we were done it was a 200-page contract," Clark says. "And I think that's still the base that they've used since then."
Among the items on the negotiating table: how much the network pays, what time events will be held, how many hotel rooms there are and which ones NBC gets, where cameras can be placed, and what happens if the U.S. team cannot attend or if there is a terrorist attack that somehow disrupts the festivities. It's Clark's job to make sure everything is spelled out.
One wrinkle in the latest round of Olympic negotiations was the sudden departure last month of longtime NBC Sports executive Dick Ebersol, the man who made the Olympic brand almost synonymous with NBC in the U.S. (Ebersol couldn't agree to a new contract with NBC's corporate parent Comcast, which purchased the network for $30 billion in late 2009 from General Electric.)
Despite Ebersol's absence, Clark says NBC put together a 25-person delegation to IOC headquarters in Lausanne, Switzlerland this week to make a presentation before IOC president Jacques Rogge. The auction for Olympic television broadcast rights was the first since 2003, when a team led by Ebersol won the 2010 and 2012 Olympics for the network with a $2.2 billion bid, according to The Associated Press.
This time around, the team included Comcast chairman and CEO Brian Roberts, NBC Universal president and CEO Stephen Burke, new NBC Sports chairman Mark Lazarus, sportscaster Bob Costas, and NBC Olympics president and Gary Zenkel, a former Cahill Gordon associate, according to Clark. (Zenkel isn't the only Cahill alum at NBC; there's also vice president of business affairs Wendy Bass.)
NBC beat out rival bids by ABC/ESPN and Fox for the rights to the next four Olympics. According to The AP, the terms of the deal call for NBC to pay $775 million for the 2014 Winter Olympics in Sochi, Russia, $1.226 billion for the 2016 Summer Olympics in Rio de Janeiro, $963 million for the 2018 Winter Olympics, and $1.418 billion for the 2020 Summer Olympics (sites for the latter two have not yet been chosen).
Assisting Clark on the transaction were Cahill associate Ted Lacey and summer associate Joe Scherban. Brett Goodman, senior vice president of strategic business partnerships and business affairs for NBC Sports, was the lead in-house lawyer from the network working on the Olympic deal. (NBC's general counsel is Richard Cotton.)
Joseph Calabrese, chair of the entertainment, sports, and media practice at O'Melveny & Myers in Century City, Calif., advised the IOC on the negotiations with NBC, along with entertainment and media practice partner Christopher Brearton. (The Am Law Daily reported last year on Brearton's experience carrying the Olympic torch on the way to the 2010 Winter games in Vancouver.)
Clark says one highlight from this latest round of Olympic negotiations was the experience of holding the final bid letter by NBC on Monday, as the head of the network's technology group typed up any final changes, while Comcast CFO Michael Angelakis crunched the numbers.
"We might have been the most overqualified team ever doing that," Clark jokes. "But it was very important for NBC to win this."Make a comment