NBCUniversal will close its NBC Sports Network cable channel by the end of the year, according to an internal memo from the New York Times, and broadcast some of its sports programming to USA Network and the Peacock streaming service.
This move will close a reliable source of revenue for the company – NBCSN brings in hundreds of millions of dollars annually – to make Peacock a real competitor to other streaming services like Netflix and Disney +, and to prop up the US network.
The changes suggest that the traditional cable bundle, which has lost tens of millions of subscribers to cable cutting over the past decade but has been largely kept afloat by live sports programming, may soon lose some of that ballast as well. They also continue the trend of consolidation among cable channels as cable operators try to reduce the high fees they have to pay to carry the networks.
Some of NBCUniversal’s largest sports franchises will soon appear on the USA Network, according to the memo broadcast by Pete Bevacqua, chairman of NBC Sports Group.
“Beginning later this year, USA Network will be broadcasting and / or concurrently broadcasting certain NBC Sports programs, including NHL Stanley Cup playoff games and NASCAR races, as part of a larger transition within the company,” wrote Bevacqua.
The news of NBCUniversals plans was first published in the Sports Business Journal.
NBCSN was founded by Comcast in 1995 as the Outdoor Life Network and later renamed Versus. After Comcast, the country’s largest cable operator, acquired NBCUniversal in 2009, the channel was renamed again and NBCSN became the home of NBC sports programming that did not fit NBC itself or was not big enough for NBC itself.
Sports fans know the network for its strong coverage of the NHL, English Premier League football and NASCAR. Every two years, the Olympics were reported non-stop for three weeks, and Olympic sports such as track and field and cycling were supported in the minor years.
NBCSN is still very popular and generates a lot of revenue. It was the second most popular cable sports channel in 2020, after just ESPN and ahead of FS1 and ESPN2. According to Kagan, a media research group from S&P Global Market Intelligence, the channel is available in 76.6 million households, each of whom pays 42 cents a month for it. That means NBCSN is on track to generate more than $ 380 million in revenue this year, even before advertising is considered.
But the future of television is streaming, and Comcast is determined not to be left behind.
Comcast has shifted its strategy in the past few years to focus on its growing broadband internet business and launched Peacock as part of that effort. The ad-supported service, which is free but includes a paid tier, has attracted at least 22 million subscribers and now surpasses Comcast’s more traditional cable video business of 19 million subscribers.
NBCUniversal has already moved most of its Premier League broadcasts to Peacock, and adding more sports could give the company more leverage in negotiating bundling contracts with other broadband services.
The decision will have a significant impact on a number of upcoming legal negotiations.
For the past decade, NBCUniversal has paid an average of $ 200 million a year to be the only national NHL broadcaster in the US, with most of these games appearing on NBCSN. However, that deal expires after this season, and NBC’s agreement with the English Premier League expires a year later, in 2022.
A question that is likely to surface in future negotiations is whether NBCUniversal can find enough airtime on the NBC and USA networks to provide enough games for these leagues and others on traditional television – which retains the greatest reach – or whether the leagues The virtues of Peacock, which is still a relatively niche streaming service, can be resold.
Peacock is available to Comcast customers free of charge, but the company makes it available to other broadband providers as well. Most cable operators like Charter and Cox are now relying on the broadband business to grow and have bundled streaming services like Netflix into their internet packages. In this arrangement, the cable operators collect a fee from the streaming platforms.
For the past two decades, television broadcasters have required cable sports channels to act as a repository for the overflow of game broadcasts to which they have the rights. ESPN broadcasts so many games that there are now nine cable channels to show them all. However, a streaming service can display an infinite number of games at the same time, eliminating the primary uses of cable sports channels.
While entertainment programs shifted to streaming services in droves, the sport lagged, with the biggest leagues and events still being seen on traditional network television, but most of the games being played over cable. Only the smallest leagues have most of their programming available on streaming platforms – which makes them perhaps the most forward-looking.
Edmund Lee contributed to the coverage.