SBJ Media: Major distributor not sure what to make of planned NBC Sports cable network

I’m back from rural Connecticut, where I headed last night to visit a friend at her house (with no cell service) -- a nice break from reality.

I also went to back-to-back Liberty games this weekend, and a highlight (captured by ESPN) was seeing Ellie the Elephant dragged off the court Saturday night following a tech given to Sabrina Ionescu. Justice for Ellie!

NBCUniversal’s plan to launch (or relaunch?) a cable sports network -- first reported by the WSJ -- as early as this fall has at least one major MVPD confused about what parent company Comcast is attempting, especially after NBCU shuttered NBCSN back in 2021. Most of that sports content pivoted to distribution largely through streaming service Peacock and USA Network on cable TV.

The new network would reportedly not be available on typical broad channel packages. Instead, the move aims to split rights to maximize revenue, giving customers an option to only subscribe to select amounts of content. That includes customers who don’t pay for Peacock but may still want sports content.

But one major cable distributor expressed confusion, with a source telling SBJ that NBCU and Comcast have not communicated yet about any new network. “We feel like maybe we’re missing something,” an MVPD source said. “Unless there’s some new content, which it doesn’t sound like there is, and it’s repurposed feedback and some other stuff, then I’m not getting it.”

For a company like Charter, the biggest MVPD in the U.S., a new NBCU-backed à la carte sports channel -- which a source confirmed would be the format -- doesn’t make sense. Charter’s Spectrum TV Select customers already receive Peacock Premium at no additional cost, as part of a deal announced in March.

DirecTV has already split up its sports rights tiers and has a full sports package with the MySports streaming package, a $69.99-per-month offering that includes content from ESPN/ABC, Paramount/CBS and TNT Sports. Charter has made similar moves and is in the process of acquiring Cox Communications, another top-10 cable company in the U.S.

For customers staying with the cable bundle, the new network would give them the option of paying a premium on their cable bill instead of splicing dollars into streaming services.

The new channel would carry sports that are also streamed on Peacock’s platform. That could be a significant number of NBA games, since 50% of NBC’s new NBA deal was set to be streamed on Peacock. However, sources were adamant that a new cable network won’t undercut Peacock’s value to NBCU.

From the property side, there’s little downside in having games seen in more places. An NBA source said the league fully supports NBC in launching a cable network that would enhance accessibility to games.

There’s a chance we have more clarity Thursday when Comcast/NBCU reports its third-quarter earnings.

Ever since my colleague Ben Fischer reported a little less than two weeks ago that there may be a special league meeting in August on the topic of a Disney-NFL Media deal, there has been a flurry of reports seeking to chase down what such a deal would finally look like.

The move would likely come ahead of ESPN’s direct-to-consumer product launch, targeted for this fall. However, many questions remain around what that sale/merger could look like.

“To be in business with the NFL, which is the bigger picture here, it’s a hard thing to argue that that’s a bad thing for the Walt Disney Co. or for ESPN,” a sports media industry analyst told me.

So what could the structure of a deal potentially look like? After a report in The Athletic said a deal was “inside the 5-yard line,” CNBC reported some key details late last week, and per CNBC sources, those details include:

• The NFL acquiring a 10% stake in ESPN (a number CNBC also called a “moving target”)
• ESPN would own all of NFL Network and NFL RedZone, not just a controlling stake
• ESPN is not in talks to acquire all of NFL Media, but rather some of those assets (other potential parts include the NFL app, NFL+, NFL Films and NFL.com)

Should NFL RedZone be part of the deal, that property would add incremental value ahead of the ESPN direct-to-consumer product launch. However, RedZone is “not as big” an asset as many might think, the same media analyst told SBJ.

“It’s not that many subscribers, so that’s an open question,” the analyst said. “Clearly that is incremental help in new value.”

One other separate NFL asset that has not yet come up as part of these talks -- and whose rights remain out in the market -- is the NFL Draft, which a source told SBJ was expected to remain at ESPN for years to come.

Who else gets to stay at ESPN?

The media industry analyst told me that the bigger question for ESPN DTC is if the company is going all-in on NFL and NBA, “what does that mean for any of their other tertiary rights?”

Some of those other rights are still up in the air, including F1, UFC and MLB. It looks more and more likely that ESPN has walked away from F1, which is reportedly landing at Apple for $150 million per year, a figure far above the $85-$90 million ESPN currently pays.

“MLB is the other obvious example, and what they do with UFC is the other thing right in front of us right now,” said the analyst. “ESPN is very much focused on the sports rights properties that will continue to move the needle for the company, and with NFL and NBA right secured and their own guidance that they’ve given to get back to profitability, growth or growth in their profits, the company has to make a choice as to where they’re allocating their future sports rights commitments.”

Disney will report its third-quarter earnings next week, so stay tuned for more potential information around the NFL and DTC.

Joe Hand Promotions has been in the game since 1971, but it perhaps has seen the most rapid changes in the last several years with the transition to streaming. The company distributes pay-per-view events for out-of-home commercial establishments (think bars, restaurants, airports, etc.), with major clients including folks like UFC, Top Rank and DirecTV.

President Joe Hand Jr. jumped on SBJ’s Sports Media Podcast to discuss the company’s evolution and what the future of sports media and streaming could look like. Here are some of the biggest takeaways.

Joe Hand Promotions is diversifying beyond the fight game

“Boxing has always been there, and we work with all the promoters that are out there in the industry, but now I’m in meetings with Netflix, ESPN+, DAZN,” Hand said. “All of these streaming platforms that are creating content that our customers -- the bar owners -- want to show in their establishments because it will bring traffic, it’ll bring people in to spend in the restaurants.”

A shift to streaming and media rights changing partners aren’t a problem

“We knew streaming was going to make an impact, but we thought it was going to impact us in a different way,” said Hand. “What it’s done is it gives us a menu that was kind of compact, unique -- with UFC and boxing or whatever. Now I’ve got ESPN+ and DAZN bringing all their content from Europe and Netflix doing all the special events that we’re doing.

On media rights moving around, he said, “Wherever the content ends up showing up, we’re going to be able to represent that company.”

Top Rank will have a new home.

The promoter had been with ESPN for eight years, but that contract ended last week.

“You’ll probably see some announcement soon that Top Rank is kind of putting their tent up someplace new,” said Hand.

We’ve got to talk about the UEFA Women’s Euros. I’m really interested to see what England-Spain drew Sunday on Fox (for the record, I was pulling for Spain). When I caught up with Fox Sports’ research chief Mike Mulvihill ahead of the tournament, he told me he expected a 50% uptick from the 2022 edition (which aired on ESPN cable networks). If the numbers ahead of the final are any indication, Mulvihill undershot. The group stage was up 90% from ESPN networks during the last iteration (to 306,000 viewers this year). The quarterfinals were up 174% to 776,000 viewers, and semifinals jumped 176% to 788,000 viewers. Those numbers speak to why Fox values its “Summer of Soccer” on both the men’s and women’s sides, and bodes well for next year’s FIFA World Cup.

I’m not going to give a review of “Happy Gilmore 2″ (now streaming on Netflix), but I am impressed with the star power the movie has. From Travis Kelce to Scottie Scheffler, it seems like anyone who’s anyone is in the Adam Sandler sequel. I loved seeing a Kelsey Plum appearance. Without spoilers, I do think there’s interesting commentary around the evolution of golf, with a fictional league that’s a little reminiscent of TGL.

The Fubo and Hulu + Live TV merger took a step forward, with Fubo sharing today it filed a proxy statement with the SEC looking for shareholder approval. It accelerates the timeline for the potential close, moving to as early as fourth quarter this year from the previous expectation of sometime in the first half of next year. Fubo and Disney announced the deal on Jan. 6, and it will give Disney 70% control of the vMVPD. Fubo co-founder and CEO David Gandler will lead the combined company.

• As my colleague Tom Friend writes for this week’s SBJ cover story, Dick Vitale’s voluble, fun-loving persona over four decades on ESPN has made him a broadcasting and college basketball legend, but his true legacy is his outspoken work carrying on the message of an old friend.
• For my column in SBJ this week, I look at what success might look like for ESPN’s direct-to-consumer product.
• Brad Cheney, Fox Sports’ VP/field operations and engineering, told SBJ’s Rob Schaefer that his network tested Edge Sound Research’s new Virtual Sound Engine system on football (NFL and UFL), with plans to add baseball and auto racing soon.
• Disney sees ESPN’s new Manhattan studios as a collaborative “content factory.”
• WWE has long been open to pulling the curtain back for a behind-the-scenes look at talent and production, but a new Netflix series takes a rare additional step to further explore the company’s creative chops, notes SBJ’s David Bourne.
• Formula E earlier this year claimed some bold U.S. viewership data for a race in Mexico, but while the event did get impressive figures, the rub is a matter of apple-to-orange comparisons and having an ideal lead-in broadcast, writes SBJ’s Adam Stern.
• LPGA Commissioner Craig Kessler is less than two weeks into his new job, but he’s already getting props for an early win with a media call he made over the weekend, notes SBJ’s Josh Carpenter.