The coronavirus crisis could cut into Comcast’s business, with the global outbreak closing a Universal resort in Japan and raising concerns that this summer’s Tokyo Olympics could be canceled.
Comcast chairman and CEO Brian Roberts said Tuesday that the company’s theme parks unit was the most exposed to the outbreak, noting that Universal Studios Japan, located in Osaka, closed for two weeks until March 15. On Monday, a Wall Street analyst said Comcast could see theme parks revenues fall $633 million, or 11%, from last year.
“Attendance is bound to be impacted across the entire parks segment for some time,” wrote analyst Craig Moffett, of the New York research firm MoffettNathanson.
More than 3,100 people have died worldwide from the coronavirus. It has infected more than 91,000 people in 74 countries, including more than 260 in Japan, according to the Associated Press. The World Health Organization said Monday that public health officials are in “uncharted territory” as they fight to contain the outbreak.
The Tokyo Olympics are scheduled July 24 to Aug. 9. At a meeting of the International Olympic Committee’s executive board Tuesday in Lausanne, Switzerland, spokesperson Mark Adams reiterated, “We are going to have the games on the 24th of July. ...
"I would like to encourage all the athletes to continue their preparation for the Olympic Games Tokyo 2020 with great confidence and with full steam,” he said. The executive board meeting will continue Wednesday.
Earlier Tuesday, Japan’s Olympic minister told the country’s parliament that the contract for the Olympics requires only that the games be held sometime this year, although Olympic officials seemed determined that they be held as scheduled .
Comcast’s NBCUniversal has a multi-billion-dollar deal to broadcast the Olympics.
In 2011, the company agreed to pay $4.38 billion to broadcast the summer and winter games from 2014 through 2020. That averages to about $1.1 billion per Olympics, though the summer games typically cost more than the winter ones.
During an investors conference in San Francisco hosted by Morgan Stanley, Roberts said Comcast had insurance to cover its expenses if the Olympics were canceled, though the Philadelphia media giant wouldn’t profit from what’s usually a boon to its broadcast and cable TV business.
“There should be no losses should there not be an Olympics. It just wouldn’t be a profit this year,” Roberts said. “Again, we’re optimistic the Olympics are going to happen.”
Already, NBCUniversal has received more than $1 billion in national advertising commitments for this summer’s games.
“With just under five months to go until the Opening Ceremony, we have sold nearly 90% of our Tokyo Olympic inventory and the vast majority of our tent-pole sponsorships have been sold,” said Dan Lovinger, executive vice president for ad sales at NBC Sports Group. “We recently surpassed $1.25 billion in national advertising for Tokyo, which exceeds our sales total for Rio 2016 and is a new Olympic record.”
In 2016, Comcast raked in $1.6 billion in revenue from the Rio Olympics, including $1.2 billion from advertising, according to a quarterly earnings report.
Roberts said the coronavirus crisis temporarily halted construction of its planned theme park in Beijing. Roughly 13,000 workers were shut down for several weeks before resuming work, though Roberts said he expects the park to open on time in 2021.
Moffett, the analyst, said coronavirus could affect Comcast’s film business, too. He said the “Fast & Furious” and “Minions” franchises, set to release this summer, could under-perform expectations at the box office in China, the epicenter of the crisis where more than 80,000 people have been infected.