Comcast and NBC launch sports network

The new outlet will boost programming and distribution of the former Versus. Costs could rise.

Posted: January 01, 2012

It's showtime for the new head of NBC Sports, Mark Lazarus, and programming executive Jon Miller on the 15th floor in Rockefeller Center.

After Monday's televised Winter Classic - the Rangers-vs.-Flyers NHL game at Citizens Bank Park - the also-ran Versus 24-hour sports channel that never lived up to its ratings expectations under Comcast Corp.'s ownership will be rebooted as the around-the-clock cable outlet NBC Sports Network.

A national sports channel was one of the economic justifications for the $30 billion marriage of Comcast and NBC Universal Inc. in 2010, which combined the cable distribution power of Comcast, whose cable lines pass about 50 million homes, with the artistry and sports legacy of NBC-TV.

But the rebranded channel also is being launched at an inauspicious time. Legendary NBC sports head Dick Ebersol resigned in a contract tiff in 2010, the cable channel lacks the slam-dunk rights around which to build a sensational brand, and pay-TV operators are publicly bashing the inflationary cost of sports channels.

Rebranding Versus to NBC Sports Network won't immediately affect cable- or satellite-TV bills. But industry experts say a new upgraded sports channel will likely reinforce the higher prices for sports TV rights that are then passed along to consumers.

"What was a minor problem is turning into an astronomical problem," Time Warner Cable CEO Glenn Britt told the Wall Street Journal in December, referring to the cost of sports programming generally. "The ultimate solution is to get that programming on some sort of smaller packaging scheme," which could mean having those who want to watch sports pay for them.

Earlier in the month, Liberty Media Corp. CEO Gregory B. Maffei described the rising cost of ESPN as a "tax on every American household," though he said regional sports networks also were to blame.

Despite the outside noise, Lazarus and his NBC team have been putting into place a long-term strategy for the NBC Sports Network. There are plans for a new headquarters, with studios, at a former manufacturing plant in Stamford, Conn.

Programming this first year will lean heavily on the Olympics, 38 regular-season Major League Soccer games, 13 IndyCar Series races, 14 hours a day of Tour de France coverage for most of July, 90 regular-season NHL games along with 50 NHL playoff games, 20 hours of horse-racing coverage around the Triple Crown, and 40 college football, basketball, and hockey games.

NBC says it will bring its distinctive brand of storytelling to the channel, setting it apart from ESPN. NBC personality Bob Costas will host periodic "town hall" specials, the first of which will appear before the Super Bowl from 613-seat Indiana Repertory Theater in Indianapolis.

On Monday, the NBC Network will broadcast an original documentary on the 1972 hockey series between Canadian NHL all-stars and the Soviet national team, airing at 4:30 p.m. "The thing about a 24-hour sports network is that it has a voracious appetite, and it never sleeps," said Miller, whose job it is to fill those hours with games, talk, or movies. He acknowledged NBC's thin cupboard of big-time sports rights. But, he said, "it makes you work that much harder to come up with your own stuff. One of the frustrating things about this business is that you don't own anything. You rent it."

More than 30 years after ESPN's debut, sports have proliferated, with cable channels devoted to baseball, football, basketball, the Big Ten Conference, racing, tennis, and regional sports.

"The evidence is clear that sports is the most important entertainment property in America today," said Neal Pilson, the former president of CBS Sports and now a consultant. He estimated that in the late 1970s the Big Three TV networks of ABC, NBC, and CBS aired a combined 1,000 hours of sports. Today, a sprawling variety of media outlets air more than 100,000 hours of sports on TV networks, cable channels, and online platforms, he said.

Pilson believes there is ample elbow room for the NBC Sports Network. The only threat to the industry, he believes, is the concern expressed by pay-TV operators about cost. A solution would be for pay-TV operators to unbundle sports from the typical cable packages sold by Comcast, Verizon, DirecTV, and others.

Two companies hurt by such an unbundling could be Comcast, the owner of 11 regional sports networks and now the NBC Sports Network, and the Walt Disney Co., the majority owner of ESPN. But any changes would likely be a long and hard-fought political battle in Washington, Pilson said.

As for now, Comcast can improve the quality and distribution of Versus, leverage the NBC name, and produce quick financial gains.

Packaged with other NBC cable channels, Versus - soon-to-be NBC Sports Network - could add an additional 10 million to 20 million homes of distribution. Versus now reaches 76 million homes, and there are about 100 million pay-TV homes in the nation. Each new home of distribution brings additional subscriber revenue. As the channel's quality improves, Comcast can charge higher subscriber fees. Versus currently charges distributors 30 cents to 35 cents a month per home while ESPN charges more than $4 a month per home, according to industry estimates. And as the distribution broadens and ratings improve, NBC should charge advertisers higher rates.

Lazarus, whose father, John, was the head of sales and marketing for ABC Sports in its gloried era under TV pioneer Roone Arledge, said there was a significant upside to the NBC Sports Network. But the cable channel also has to be viewed in the context of NBC's other sports properties: the regional sports networks, the Golf Channel, and the NBC sports on broadcast TV.

"It's our job to bring the art of NBC and the commerce of Comcast together to create a powerful sports brand," Lazarus said, adding that in terms of rights, "We've been aggressive in acquiring what's out there, and there has not been a lot available."

"We want to compete with everyone who wants national sports eyeballs," Lazarus said, noting that ESPN does not own regional sports networks and doesn't use partner ABC as NBC intends. NBC Sports intends to "circulate" the sports audience between the over-the-air NBC stations and the cable channels.

"We have a unique set of assets. We think it allows us to speak to a local and national audience," Lazarus said. The goal, he added, is "to get to a place where people think this is an important place on the sports dial."


Contact staff writer Bob Fernandez at 215-854-5897 or bob.fernandez@phillynews.com.

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