NBCUniversal says it will be OK if the Olympics get cancelled, but it could lead to an unprecedented media disaster with tons of ramifications

• Mike Shields, the former advertising editor for Business Insider who is now CEO of Shields Strategic Consulting, argues that despite NBCUniversal being able to financially recover from the 2020 Summer Olympic Games being cancelled, the effects on the media industry would be disastrous.
• The Games are scheduled to occur from July 24 to August 9, but the unpredictable coronavirus spread could cause them to be postponed - or cancelled.
• Cancelling the Olympics would mean that fewer people will pay attention to network broadcasting over the summer, which has been happening already with the rise of streaming services.
• And if the Tokyo Games are off, come 2024, it will have been eight years since the last Summer Olympics, leaving time for younger generations to lose interest in their importance.
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There's no question that a cancellation of this summer's Tokyo Olympic Games would be extremely painful in the short term for NBCUniversal, given that billions in rights fees and ad sales are on the line.

What's perhaps harder to calculate are the potentially devastating ripple effects that would emanate from such a dire decision (which let's hope does not happen).

Right now, officials say the Games - scheduled to occur from July 24 to August 9 - are still on, though Olympic minister Seiko Hashimoto hinted that they could somehow be postponed until later in the year. However, given the unpredictable spread of the coronavirus, mounting death toll, and extreme caution so many companies and event organizers are adopting, all bets are off.

Surely the folks at NBCU, along with all the other Olympic media partners, are more than a little nervous. Cancelling the games would result in a business catastrophe with few comparisons.

Back in 1980, NBCU had to cancel its coverage of the Summer Games (which were held in the now-former Soviet Union), since the US pulled out of the Games following the Soviet Union's invasion of Afghanistan. The network lost $22 million as a result, according to the Washington Post.

There are less obvious ways a cancelled Olympics could hurt

But even that figure sounds pretty palatable right about now - there are ways this could hurt a lot worse.

For starters, there's NBCU's financial fallout. The media giant spent over $7 billion in 2014 to extend an already hefty $4 billion deal inked in 2011, locking up the rights to air the Games through 2032. But NBCU can recoup insurance on that deal.

Here's what can't be replaced:

1. 17 days of massive TV and digital viewership. Earlier this week, NBCU said it had sold $1.25 billion in ad sales for 90% of its inventory. You can't just move those advertisers to "The Voice" or a few PGA tour events and think that things will be OK. We're talking about 7,000 hours of high-rated TV that - poof - would disappear.
2. The Olympics is a unique sporting event in that it attracts a larger-than-usual female audience - one that isn't replicated by, say, a college football game.
3. Besides losing the games, NBCU would lose all the ancillary viewership drawn from specials, such as athletes showing up on the "Today" show and "The Tonight Show Starring Jimmy Fallon," as well as custom Snapchat videos and the like.
4. Plus, the Olympics typically serve as a monster promotional vehicle for NBCU's primetime lineup right before the fall season. While fall TV isn't what it used to be, in this age of fragmented viewing, it needs all the help it can get.
5. Let's not forget that NBCU also has to program those 17 days with something. It's not as if it has a lineup of hit shows sitting around.
6. Besides old-fashioned TV, the Olympics are designed to be a springboard for NBCU's massive bet on Peacock, its answer to the streaming wars. No Olympics means there's suddenly a whole lot of pressure on that "Saved by the Bell" reboot.
7. More tactically, the Olympics are also supposed to be a major coming-out party for over-the-top viewership and advertising. NBCU has been viewing the Games as the perfect opportunity to help establish new programming and business models.
8. Some of the biggest TV brands in the world use the Olympics to launch massive ad campaigns. The McDonald's and Visas and Coca Colas of the world spend billions on custom, creative promotions and endorsement deals with athletes. They hire sports agencies to do research and produce it all. Suddenly, all these investments become completely worthless if the games go away.

Beyond all these individual pain points, there's the bigger picture to think about. Consider how vulnerable the broadcast network model feels at the moment, and how much it banks on massive events like the Olympics.

During the past few Olympic years - particularly Rio's in 2016 - NBCU already had to face more than a few questions about the very viability of the Olympics for millennials. The media giant is sure to get the same questions about Gen Z. It was already going to be hard to get these groups to stop their regular nightly streaming for this summer's Games, given Tokyo is 14 hours ahead of New York.

Getting young viewers back would be tough

Now, imagine that the Olympics are off the airwaves entirely for another two years - four for the Summer Games. That means come the summer of 2024, NBCU has to remind young people, "Hey, I know you haven't watched archery in eight years, but please put down your augmented reality goggles or whatever and tune in!" It's a tough pitch.

Indeed, the more broadcast TV loses its event-gathering power, the more you have to ask yourself: What is its purpose in the new media world? And if an Olympics cancellation hurts NBCU like it could, what other media companies are going to want to bid for it next time around?

Meanwhile, it's an uncomfortable question to ask, but does anybody win from an Olympics cancellation? We suppose this provides a nice opening for HBO Max, Disney Plus, and Apple TV Plus to have a big summer. If people aren't going to the movies, or watching the Olympics, they might as well stay home and binge. The biggest winner will likely be the incumbent: Netflix (which might want to rush a new season of "Stranger Things" out the door).

Still, we have a long way to go. Here's to hoping we're all watching lots of swimming next summer instead of the news for virus updates.