Friday, May 7, 2021

NBCUniversal Explores Options For Streaming Sports Channels

NBCUniversal has explored putting its regional sports channels on the streaming service Peacock or selling them off, as the company tries to figure out a future for a business under increasing stress, reports The Wall Street journal citing people familiar with the situation.

Early this spring, NBCUniversal planned to start streaming NBC Sports Philadelphia, which broadcasts the city’s pro basketball, baseball and hockey games, the people said. The goal was to be up and running in time for the Major League Baseball season that began in April.

The plan was halted over concerns that it would conflict with the broader streaming strategy of NBCUniversal, a unit of Comcast Corp., the people said.

NBCUniversal is still considering options for streaming its sports channels on Peacock, the people familiar with the situation said. The company also is exploring whether to sell off the networks and sees the teams associated with them as potential buyers, some of the people said. Teams often hold an equity stake in the networks that air their games.

Regional sports channels were once an engine of growth and profit for media companies, because of the high fees owners were able to charge cable and satellite TV providers to distribute them. Now, the business is eroding as consumers cancel pay-TV subscriptions or switch to traditional or online packages that don’t include the sports networks.

In 2020, regional sports networks collectively had 145.8 million subscribers, down 23% from 190.2 million in 2014, according to S&P Global Market Intelligence. The pandemic pummeled the industry. More than $1 billion in rebates were given to pay-TV subscribers when leagues paused their seasons, according to S&P.

Meanwhile, some channels are on the hook to pay billions of dollars of media-rights fees annually, meaning they will face a financial squeeze in coming years.

Building streaming businesses has become a popular option for traditional TV networks. Sinclair Broadcast Group Inc., owner of the Fox Sports family of regional sports channels—rebranded as Bally Sports in a licensing deal with casino operator Bally’s Corp. —plans to sell streaming subscriptions for 19 of its networks, with an aim to launch in 2022.

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