For months now we've been seeing a steady stream of TV ads hooked to the Olympics. Most are designed to trigger tears of athletic joy and/or spark the waving of Canadian flags (preferably while drinking Coke from a Petro-Canada glass).

Those ads, and more importantly, which channel they're aired on is a big deal in the broadcast world.

Back in 2005 there was fierce competition between CBC and CTV over who would hold the Canadian rights. In the end, CTV won the battle, agreeing to a package that has them paying $90 million (US). The scuttlebutt at CBC at the time was that it was a shame not to be the host broadcaster, but that the price didn't make sense in terms of how much ad revenue could be recouped. (Woo Hoo, break out the champagne, we lost!!)

For all those dollars, CTV gets a lock on broadcasting the actual events. The images and sounds coming out of those venues are the raw material that they have to spin into gold by selling ads. Lots and lots of ads.

Although they paid top dollar things were looking pretty good until the worldwide financial crisis hit just as they were ramping up efforts to lock in advertisers. Companies were running scared, wondering where the bottom would be and one of the easiest things to cut was advertising.

CBC felt the pain too. The recent layoffs around this place are largely due to the drop in commercial revenue on the television side.

To get a sense of the scale of the problem I talked to a number of people. One of them was Andrew Bennett, who has the title of 'chief strategy officer' for a New York City ad firm, Euro R-S-C-G.

Andrew is very plugged into what's going on and talked about the Olympics as "a major, drama, tv, event-driven property." In addition to a whole mouthful of words, Andrew was talking about how TV is still the important part of the equation in terms of cash, even though much of the hype is about experiencing the Games online or on your cel phone screen. I take it this means you online readers aren't doing your part for capitalism by clicking on all those ads.

Since he was in New York Bennett was very much into the buzz surrounding NBC and their plan to strategically lose $250 million on the Games. That's not hedge-fund collapse big, but it's still serious money.

Although CTV is the corporate name most closely linked to the Games' broadcast, they're actually put on by something called the Broadcast Consortium, which is a partnership between Rogers and CTV.

The man running the show is Keith Pelley, who was very friendly in a recent phone interview, even when he was refusing to talk details on how much cash the consortium might be losing on the whole deal.

Keith said a few things have helped, including a stronger Canadian dollar (they paid in US dollars) and an up-tick in the economy which, means more companies coming forward to purchase ads even this close to the Games.

I also talked to a stock market analyst who follows all this and he said the cost of the rights, at $90 million,(about the size of the typical banker's bonus?), along with the cost of putting the games on the air, could be a hit to Rogers and CTV, but it's not enough to make them fade to black.

I reported on this topic on the World at Six Feb 3, 2010.