When Comcast decided in November to spin off its cable channels into a new independent venture (working title: SpinCo), it added another twist of its own. The new company was built around channels such as USA, MSNBC, CNBC, E! And Golf Channel will include “major sports properties” such as the Olympics, PGA Tour, Premier League Soccer, and WWE.
Those sports will be a key driver for the new company as it attempts to navigate uncharted waters outside of NBCUniversal and will be separated from the rest of NBC Sports.
Details of the split remain vague. “I can’t speak to all the plans for how this is going to happen, but from a sports perspective,” NBC Sports President Rick Cordella said, speaking at the Sports Business Journal’s conference on Nov. 20. , the partners we have in cable properties such as Golf Channel and USA, we intend to meet all of our obligations and commitments.”
According to people familiar with the matter, the company is considering how to divide sports rights between the two companies, and both companies are likely to terminate their sublicense agreements with the other party.
And SpinCo CEO Mark Lazarus, who previously led NBC Sports, added that he would like to know what other opportunities there will be in the sports space once the spinoff is complete.
This spinoff highlights a rapidly growing trend in the world of cable TV. Suddenly it seems like every cable channel is a sports channel.
FX, best known for high-concept dramas like The Bear and Shogun, will also televise the preliminary bouts of UFC 309 on Nov. 16, bringing MMA to 67 million U.S. households. (which has become the most widely distributed cable channel in Disney’s portfolio).
FX has televised sports from time to time (the last time it hosted UFC prelims was in 2019, when similar college football scheduling conflicts caused the rebooted 1), but indicates that UFC fights will be aired on any cable network in 2024. A channel can become a sports channel if a rights agreement requires it or if a company wants to enhance the channel to avoid removal or expansion of its reach.
Perhaps the best example of the latter category is Warner Bros. Discovery’s TruTV.
TruTV can trace its origins to Courthouse TV, but for the past few years it has operated as Warner Bros. Discovery’s unscripted comedy home, anchored by prank show Impractical Jokers. That was until earlier this year, when WBD announced plans to launch a prime-time sports programming slot.
Branded as TNT Sports, the block also includes live games, alternate broadcasts, studio shows and original programming like “Above the Fold,” a sports news magazine led by former ESPNer Jemele Hill.
TruTV joins WBD’s other cable channels, including sports-focused TNT and TBS, in a new division WBD announced Dec. 12 to grow the company’s profitable but declining cable channels. The agreement separates the company from Naka’s streaming business. In this case, sports is meant to help slow Linear’s decline even as it tries to boost streaming.
The new linear division will focus on sports and news, led by CNN, while the company’s entertainment focus will remain on HBO and Max.
And on NBCUniversal’s cable channels (most of which go to SpinCo), Olympic events such as boxing, cycling and soccer were often the centerpiece of programming on the likes of USA and CNBC. Golf, of course, was on the Golf Channel.
Or consider Nickelodeon. Nickelodeon, the quintessential children’s cable channel, is part of Paramount’s portfolio. The company also has sports rights, but hoards them on CBS and Paramount+, leaving its cable channels highly depleted.
That was until the NFL expressed a desire to make their game more appealing to younger kids and families. The result was the Nickelodeon-branded NFL altcast. It’s a new annual tradition that gets bigger and bigger each season, with the added benefit of bringing live NFL games to Nickelodeon.
Despite companies like WBD and Peacock leaning into streaming (WBD streams most sports in simulcast on Max, as Peacock and NBC do), the breadth of sports is Still tied to pay TV bundles, the more sports companies they can cram into their channels, the better.
“There’s no getting away from the fact that sports rights remain extremely important to our linear channels, and we will absolutely respect that,” said Bruce Campbell, chief revenue strategy officer at WBD. He spoke at a debate in Paley on November 13th. New York Media Center.
But the move to beef up cable channels with live sports also clashes with the stated ambitions of leagues and sports owners who have watched cable TV’s decline with fear and concern for their own futures.
The league wants broadcast rights fees to continue to increase and wants its fan base to grow, not shrink. And sports rights holders are increasingly seeking the reach of broadcast television in combination with the younger-skewing audiences of streaming platforms.
Let’s take a look at the NBA’s new rights deal starting next year.
“Our broadcast exposure will go from 15 to 75,” NBA commissioner Adam Silver said on Nov. 14 at the Paley Center. “What’s interesting about our new deal is that all international matches will be available on streaming services, which is just a fraction of our games now. When we signed the deal, cable slash satellite was in over 100 million homes, so that’s probably around 50 million pure cable. So it’s beyond that, but right now a wide swath of people in the U.S. can’t get games that are based on the technology that’s out there.”
The NFL is similarly focused on coverage and streaming depth, striking a deal to bring its Christmas games to Netflix this year.
But for cable channel owners, especially those that don’t have a long history of sports programming, live sports, whatever they can watch, is a sign of relevance to a beleaguered ecosystem and rich new streaming bidders. That’s one way to keep it as long as possible. For sports.
“As the old pay-TV bundles have shrunk, new bidders have emerged: streamers,” said John Miller, CEO of Integrated Media. Entertainment and Sports vs. Entertainment Only. Over the past decade, a lot of money that streamers spent solely on entertainment is now being spent on both entertainment and sports. Legacy networks will need to direct the majority of their content spending to sports to protect rights deals. More funding for sports means less spending on entertainment. ”
Streaming is the next frontier for channels that are lucky enough to have been in the sports field for many years. ESPN is hard at work on its “flagship” streaming service, which is scheduled to launch next August, and pay-TV subscribers will likely have access to it in a bundle.
“This is all about giving sports fans of all kinds, new or existing, casual or avid, the ability to watch, read or listen to sports anywhere,” said John Lasker, senior vice president of ESPN+. “It’s part of our ESPN strategy to deliver the service.”
Or, as Cordella explained, Comcast’s deal to spin out cable channels is “probably just a microcosm of our larger industry.”
“When NBCU was first acquired by Comcast,[the cable channel]was a crown jewel. And now we look at things a little differently in this fragmented media world,” he said. added.
As a result, sports will be moving into streaming to shore up the remnants of the shrinking cable bundle while simultaneously gaining a foothold in the next frontier.
