Olympic earnings, August 12, 2004

Olympics seen unlikely to sway U.S. earnings

14:56 12Aug2004

By Andy Sullivan

NEW YORK, Aug 12 (Reuters) - Even before the Olympic torch is lit in Athens, U.S. corporate contestants are already proclaiming themselves winners and losers in the competition off the field.

But the actual business impact of the Olympic Games is likely to be less dramatic than a 3 a.m. broadcast of the javelin-toss semifinals, according to analysts.

General Electric Co.'s NBC television network, which will broadcast the games, is one likely medalist.

Sporting-goods retailers also could benefit as spectators resolve to hit the gym -- or at least put on red, white and blue jogging shorts.

The race for last place seems to be a bit more heated.

Video-rental titan Blockbuster Inc. said its earnings will likely suffer as viewers watch weight-lifting and badminton on NBC rather than "Hellboy" or "Starsky & Hutch" on DVD.

Italian casual-dining chain BUCA Inc. said sales will be flat as diners eat home-cooked pasta in front of the television.

Shoe maker Nike Inc. has reported strong sales growth this year, but warned that its advertising costs will be higher than normal during the Olympics.

Even electronics maker Sony Corp. has said it could suffer as rivals Matsushita Electric Industrial Co. Ltd. and Sharp Corp. have rolled out new DVD recorders and flat-panel televisions ahead of the games.

But in a media-saturated landscape the Olympics aren't likely to significantly affect consumer behavior, analysts said.

"I don't see it as a big deal" for restaurants, said Doug Christopher, an analyst at Crowell Weedon. "You've got so many things going on these days that I think it tends to even out over time."

NBC stands to reap an additional $800 million to $900 million in advertising revenue, but the competitive balance with other networks will return to normal once the games end in September, said Leland Westerfield, an analyst at Harris Nesbitt.

"The Olympics in the media landscape can only be positive, neutral at worst," he said. "Whatever shift in advertising away from CBS and ABC over to NBC occurs only briefly."

Those who cite the Olympics as a cause of their woes may be struggling with less transient challenges.

Blockbuster is the largest video-rental chain in the United States, but the entire industry is under pressure from Internet-based start-ups like Netflix Inc. and new business models like movies on demand.

Restaurants need to focus on delivering good service and good food, rather than worrying about what's on television, Christopher said.

lia ground to a halt when the summer Olympics were held in Sydney four years ago -- even brewing company Lion Nathan Ltd. reported that beer sales fell 12 percent.