August 5, 2016 / 8:12 PM / 2 years ago

Olympics-ESPN to battle local networks for Olympic viewers

RIO DE JANEIRO, Aug 5 (Reuters) - ESPN, shut out from showing the Olympics for the next 16 years in the United States, is focusing its efforts on the Latin American TV market, which is already teeming with networks covering the Games.

The Olympics, the first ever in South America, start on Friday evening and run until Aug. 21.

In many Latin American countries, no single broadcaster controls all of the Olympic TV rights. Just in Brazil, the Games will be available on ESPN, Globo, Sport TV, Record, Fox Sports and free-to-air channel Bandeirantes.

In the United States, by comparison, Comcast Corp’s NBC paid $7.65 billion for the right to air the Games until 2032 before any other U.S. media company could bid.

With most of the action running on rival networks, ESPN is trying to stand out by hiring dozens of famous Olympians to be guest commentators. Its roster includes Brazilian basketball star Maria Paula “Magic Paula” Gonçalves, Dominican Republic’s champion hurdler Felix Sanchez, American high jumper Dwight Stones and Mexican sprinter Ana Guevara.

It will have five sets in Rio and 450 staff on the ground.

“We have to distinguish ourselves from the other broadcasters. This will be our biggest Olympic production and onsite operation ever,” Russell Wolff, executive vice president and managing director of ESPN International, said in an interview.

International growth may become more important for ESPN, a unit of Walt Disney Co, as concerns about rising expenses for U.S. sports rights and cable subscriber defections rattle media investors.

This is the first time ESPN has the rights for all of Latin America, including Mexico, Central America and the Caribbean. It will reach 60 million homes in the region and also stream events on mobile devices.

ESPN does not break out Olympic budgets or financials for ESPN International, which also includes networks in other countries such as Australia and Canada.

Wolff said at a 2013 investor day that ESPN International generates more than $1 billion in revenue per year and its operating income had been growing at a 45 percent compound annual growth rate for five years.

While the economy has been struggling in Brazil and other parts of Latin America, Olympic advertising sales have been healthy, Wolff said. ESPN has secured sponsors including Gillette, Issey Miyake Parfums, Marriott and Samsung Electronics to advertise across the entire region.

“We see an uptick in ad sales from the London games to the Rio games in Latin America,” Wolff said.

Reporting by Liana B. Baker in Rio de Janeiro; Editing by Meredith Mazzilli

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