Welcome to a Friday update of Unmade. Today: Nine’s Olympics price, a mixed day on the Unmade Index and News Corp reports a fall in profits.

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The Olympics may be the greatest show on earth. But does Nine’s $315m investment stack up? (Yes, it probably does)

So now Nine is officially Australia’s Olympics network.

Wednesday night’s announcement was not a surprise.

Seven signalled just before Christmas that it had dropped out of the running after holding the rights for most of the last half century. And Ten’s owner Paramount had already made clear that it wasn’t in the hunt.

The main thing we were waiting on was price. Across the 2024, 2028 and 2032 Summer Games and the 2026 and 2030 Winter Games, the cost will be $305m in cash and $10m in contra. That’s well below the $400m the International Olympics Committee was said to be looking for.

To get to the average cost, it’s not particularly logical to take the $315m and simply divide it by five to get a number of $60m or so per Olympics. Summer Olympics are worth more than winter Olympics, and timezone makes a massive difference too. Next year’s event is in Paris, so much of it will be in the middle of the night, Australian time.

The single most important event of the five is the gift Nine’s CEO Mike Sneesby is most likely to be bequeathing his successor in nine years’ time (or himself, if he sticks around) - the prize of the 2032 Brisbane Olympics. Everything will be building towards Brisbane.

If I had to assign value, I’d argue Brisbane is worth $100m. Perhaps the Paris and LA Summer Games are worth about $70m each, while the two Winter Games in Italy and a yet-to-be-decided host might be worth about $30m each.

That’s a lot. But the reaction of the stock market suggests that investors think it was about right. Nine’s share price nudged up by 0.45% on a day when the wider ASX fell slightly.

The Olympic broadcast itself had come to be loss making for Seven West Media. The boost in sponsorship and advertising didn’t cover the expense of the rights, along with the production cost of sending huge crews.

The theory goes that it can be worth it because of the ability to promote the rest of the year’s schedule to the captive audience tuning in for the sport. (Remember how Nine bludgeoned us to watch the Big Brother reboot when it briefly held the Olympic rights in 2012?). That boost in 2021 came with a loss of $50m for SWM on the Tokyo Olympics.

Nine is the only media company in the country that will be able to make use of the rights across all platforms, which will also help spread the costs. Nine is the on ly company with the ability to broadcast across free TV, ad-supported streamed TV, subscription streaming and radio.

In broadcast television that means the main Nine channel along with the secondary channels of Go, Gem, Life and Rush. In BVOD (broadcast video on demand) there will of course be live streaming of the broadcast channels, along with catchup.

I’m sure there will also be a string of pop-up FAST (free ad supported TV) channels to cater for the fact that so many competitions are occurring simultaneously.

One of the challenges will be in helping viewers navigate the options.

In radio, Nine’s talk stations, including 2GB in Sydney and 3AW, will become Olympic stations and likely boost their ratings dominance. The events will also be an opportunity for 4BC in Brisbane and 6PR in Perth to improve their share.

That’s before we come on to subscription offering Stan.

Sneesby, who has been on a staff retreat in the NSW Highlands, gave a brief video press conference yesterday, in front of an Olympic backdrop. I asked about how the investment would be accounted for.

Interestingly, he downplayed the contribution of new paid subscriptions to Stan. He wouldn’t say whether the company was budgeting for the Olympics to be loss making, but did say that most of the revenue would come from advertising.

There will be plenty of politics and PR around what Nine puts behind the Stan paywall. It will be a test of the government’s developing anti-siphoning strategy. If viewers have to pay to watch Australians compete for gold that would undermine the free to air sector’s own arguments about needing the protection of anti-siphoning in other circumstances. But on the other hand, the opportunity to boost the Stan Sport offering is too good to miss.

The major value for Nine - and indeed its commercial partners is that the length of the deal means marketers can make long term plans. All sides of the trading relationships - the Nine sales operation, media agencies and marketers - will kick into gear fast. If my maths is correct, Paris 2024 starts in 532 days’ time.

It will be interesting to see whether Nine tries to get decade-long commitments from the top tier sponsors.

The games themselves always attract advertising, but brands get disproportionate value from sponsoring, if they can afford it. The long term planning that comes with a sponsorship allows a brand to do so much more.

All sides will start extracting value well before then. Tuning into the Today show this morning I was surprised the Olympic logo wasn’t already on the corner of the screen.

There’s one other consequence. I bet there are plenty of staff at Nine who are thinking seriously about sticking around beyond 2032. Imagine working in TV at the Brisbane Games.

Unmade Index update

It was a mixed day on the Unmade Index of ASX-listed media and marketing companies, with a slight fall of 0.16% on Thursday.

ARN’s owner HT&E saw its share price bounce back by 3.04% after Wednesday’s fall, while Southern Cross Austereo was up by 2.18%.

Seven West Media was the biggest faller, dropping by 3.16%. It’s unlikely this was because of sentiment around the loss of the Olympics to Nine given that Seven had signalled that before Christmas. But maybe it was. Who knows.

As we were about to send this email, News Corp’s second quarter results came in.

I’ll analyse them properly in tomorrow’s edition of Best of the Week, but the topline number was a 30% fall in profit to US$409m for the quarter, and a 7% fall in revenue to US $2.5bn. Some of that was down to currency fluctuations, but at first glance the number was worse than I was expecting.

Time to let you get on with your day.

I’ll be back with Best of the Week tomorrow, in which I’ll be whining in a particularly entitled way about my hotel accommodation, and digging deeper iunto the News Corp results.

Have a great Friday.

Toodlepip…