Scenario: NBCpaid $401 million for the rights to televise the 1992 Summer Olympic Games, and it was
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Question:
Scenario: NBCpaid $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.CBSpurchased 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.
Questions:
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?
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