C$12-7$ Broadcast Rights

L$012\mathrm{.}1$ L$012\mathrm{.}4$ NBC paid $$401$ million for the rights to televise the $1992$ Summer Olympic Games,

and it was widely reported that it had a loss of more than $$60$ million. CBS purchased the rights to the

$1992$ and $1994$ Winter Olympic Games for a combined $$543$ million. CBS reported a $$322$ million pretax

loss on its baseball and football contracts in $1991.$

Required:

Under what conditions, if any, should NBC and CBS have written down the value of their assets?

Does this situation allow opportunities for earnings management?