With government funding and hefty advertising revenues, public broadcasters in Germany and Europe have astronomically high budgets for buying Olympic rights. Private broadcasters claim it has shut them out of the market.
Cameras are everywhere but only a few can use the pictures
A lot has changed since the Olympics in Rome were first fully televised in 1960. Today, bidding for the exclusive broadcast rights has become a billion euro international business that pits public broadcasters against private broadcasters as each compete to land the premier global sporting event.
In the United States, the Olympic Games are almost exclusively the domain of private broadcasters, which have deeper pockets than public broadcasters, which rely on paltry government funding and desperate telephone pledge drives to attract donors.
But in Europe, where public broadcasting is funded by hefty and mandatory television licensing fees for all residents, broadcasters like Germany's ARD and ZDF or Britain's BBC have an unmatchable arsenal when it comes to fighting for the rights to the Olympics.
It's an advantage that angers private broadcasters, who say they are virtually locked out.
"It's not fair at all," said Jörg Krause, spokesman for the private German sports broadcaster DSF. "The situation is made worse by the fact that ARD is now buying up the rights to all of the 'a' and 'b' category sporting events. They're able to finance this through the licensing fee and selling advertisements like private companies. There's no clear division there."
In other words, public broadcasters not only compete for advertising euros with private broadcasters but they also have a guaranteed budget that comes from fees they legally require of all residents of Germany.
Hosts for ZDF's Olympic coverage
With their war chest of cash, ARD and ZDF have snapped up the rights to most of the major European sporting events this year -- including the Euro 2004 European soccer championships, the Tour de France, the Olympic Games and the start of the Bundesliga season.
But Krause said prohibitively high Olympic licensing fees make it virtually impossible for Europe's private broadcasters to make a serious bid. But he also concedes private companies would never be able to recover the amount of money spent on the fees.
Unlike the US, where private broadcasters enjoy the highest ratings and all the advertising revenues (PBS is prohibited from selling commercial advertising), public broadcasters consistently score the highest ratings, with their only serious private competition coming from RTL, which peddles such fare as Big Brother to viewers.
The problem lies largely in the fact that the licensing fees have been pushed so high that advertising and sponsorship agreements aren't enough to recover the costs. For the public broadcasters, which draw in about €7 billion a year in licensing fees, hundreds of millions in licensing fees poses few problems.
But for private broadcasters, who in Germany draw a combined €4 billion in advertising annually, three-digit million licensing fees represent a massive strain on bottom lines. By pushing up the prices of licenses in bidding, the public broadcasters "basically buy us out of the market," said Hartmut Schultz of the German Association of Private Broadcasters.
Europeans pay €394 million for Athens
Historically, Olympic broadcasting rights for just about the entire continent have been negotiated by the European Broadcasting Union, an alliance of public broadcasters that is also responsible for the wildly popular Eurovision Song Contest.
This year, the organization paid €394 million for the rights to Athens games. EBU's director of legal affairs, Werner Rumphorst, defends the sums of money paid by public broadcasters for the right to air the Olympics' golden moments.
One of the official olympic mascots, Athene, sits in front of the Olympic rings
"We've been getting these attacks from commercial broadcasters for ages," he said. "They claim we have what they call 'double funding,' but the reality is that we have mixed funding. Double implies you have twice as much as you need. Overall, the funding is there to allow public broadcasting to fill its public broadcast remit, which is checked by various independent bodies."
Rumphorst noted that many complaints have been filed by private broadcasters against public behemoths, but that all of the cases have been thrown out in Brussels except one. "There is no substance to the claims," he said.
Most of the sports at the Olympics are smaller events, like canoeing or archery, and ultimately draw few viewers. They lack the draw of big ticket sporting events like pro soccer or Formula One racing, whose licenses are largely in the hands of the privates.
In other words, according to Rumphorst's argument, the publics take the sports the privates won't touch. But the private broadcasting association's Schultz questioned EBU's position. He noted that DSF regularly broadcasts the less-popular games of Germany's Bundesliga second league as well as other sports that are less commercially viable than big ticket events like the Tour de France or the Bundesliga.
He also questioned the role of sports in the public broadcasting mandate. Public broadcasting, he said, has a mandate to show programs that promote "political and educational" public dialogue -- the kinds of programming that would be un-economical for private broadcasters.
"There is no reason why (broadcasting) a big entertainment program like the Olympics should be paid for by the public," Schultz said.
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