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Hard Growth Strategy Financial Analysis

Winter Olympics Bidding

#Entertainment & Media
ProHub Comment

This case tests quantitative rigor combined with strategic judgment. Candidates must calculate NPV precisely ($200M) but then determine whether intangible factors (viewer acquisition, brand prestige, cross-promotion opportunities) justify adjusting the bid upward or downward. The case rewards structured thinking, financial accuracy, and ultimately the ability to defend deviations from the NPV using game theory and competitive bidding dynamics.

Estimated Time 38 minutes
Difficulty Hard
Source Kellogg
10 / 100
Our client, a major US television network, is trying to figure out how much to bid for the exclusive right to broadcast the Winter Olympics Games in four years time. The Winter Olympics are a huge deal and will require a significant amount of capital to secure the rights, so our client has brought us in to help them figure out the right bid amount after considering all relevant factors.

Clarifying Information

Revenues:

  1. No subscription revenue, but can keep 100% of advertising revenue
  2. Ad rates are $400k per 30 second ad for prime time (weekends, weekdays 1900 - 2300) and $200k non-prime time
  3. Market research has shown that you can include no more than 10 minutes of advertising per hour

Costs:

  1. $482m of total production costs
  2. Opportunity cost: $1m/hour
  3. Time value of money: 4 year lag for receipt of revenue
Mock Interview
Interviewer

Our client, a major US television network, is trying to figure out how much to bid for the exclusive right to broadcast the Winter Olympics Games in four years time. The Winter Olympics are a huge deal and will require a significant amount of capital to secure the rights, so our client has brought us in to help them figure out the right bid amount after considering all relevant factors.

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
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Practice this case with AI Mock Interview

A TV network must determine an optimal bid for exclusive Winter Olympics broadcast rights in four years. The case requires NPV calculation of advertising revenues minus production costs, opportunity costs, and time value of money, followed by qualitative assessment of strategic benefits to arrive at a final bid recommendation.

Key Insights:

  1. Revenue calculation requires careful parsing of prime vs. non-prime advertising slots across different days/times using the provided schedule
  2. Three distinct cost categories must be identified: direct production costs ($482M), hourly opportunity costs ($1M/hr), and temporal discounting for 4-year revenue delay
  3. NPV of ~$200M serves as financial floor, but intangible benefits (new viewer access, programming promotion, prestige) and competitive bidding dynamics justify final bid positioning
  4. Strong answers demonstrate structured cost-benefit analysis while recognizing that bidding strategy requires game-theoretic thinking beyond pure NPV