Wednesday, June 8, 2011

Olympic Bid


I wonder if those that proclaimed that climate change was fake when we had lots of snow and cold temps will reconsider their thoughts as they swelter in our current upper 90 to 100 degree weather today. Or will they say that a few days or a week of a particular weather does not prove anything. HMMM. I guess that logic didn't apply when they commented on the cold days.

It was announced today that Comcast was awarded the rights to broadcast the next four Olympic games, 2014, 2016, 2018 and 2020. The cost, a mere $4.4 billion. Yes, billion. Comcast news is of more interest in this area than most because it has its roots in the Philadelphia region and it is the parent company for both the 76ers basketball and Flyers hockey teams. We have watched the company grow from an obscure cable TV provider to a behemoth in the communications industry.

What is particularly noteworthy is that, as current owner of NBC corporation, Comcast knows that NBC lost over $220 million in 2010 as broadcast provider for the Vancouver Olympics yet this gigantic $4.4 billion bid, almost $1 billion more than the next bidder, was called "a path to profitability".


I wrote more here, and thought I posted it but apparently not as I now realize that everything after this was lost.

In a nutshell, I wrote about the fact that while Comcast, a company with Philadelphia roots is willing to invest over $4 billion dollars to broadcast the Olympics in hopes that this investment will attract viewers, hence advertisers, and justify this monstrous outlay of money, the Philadelphia school district is struggling to bridge a shortfall which has already resulted in the layoff of 1500 teachers.

I also commented about how when a business invests huge amounts of resources in hopes of future profits, when the government proposes "stimulus" spending as the Obama Administration did two years ago, there was major outcry from the right (and in some cases, the business community) claiming this was irresponsible spending. Why is investing money to attract TV dollars good business but investing money to avoid bankruptcies and home foreclosures not a good idea?

Some might answer that a poor business decision produces monetary losses while a poor economic decisions by the government just causes higher taxes. I would counter that in the case of Comcast, an Olympic failure to create profit might just result in higher cable bills down the line. I also wonder if that $220 million loss indicated above might have been used to offset profits, which means a lower tax bite which means the American taxpayer paid for that poor decision as well.

My final point was that perhaps we should embrace the beast (in this case, Comcast playing the role of the beast). If indeed, Comcast (or an huge corporation) is able to use losses as tax write-offs, then perhaps we should marry these large entities to our financially struggling school districts. Maybe that $220 million tax credit could bypass the middle man and go directly to the schools. Still a tax credit but used for a much better purpose. And maybe the kids could get free cable as well.

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