What is the future of the Golf Channel on NBC? Comcast’s announcement raises questions

Welcome back to another extended edition of Hot Mic Newsletter, GOLF’s weekly installment covering all things golf media from me, James Colgan. The subject of this week’s newsletter is a surprise earnings announcement from NBC/Golf Channel owner Comcast. As always, if you want to be the first to receive exclusive insights like these directly from me, click link here to subscribe to our free send the newsletter. But first, we work the lines on Comcast’s latest earnings call.

BIG COMCAST NEWS

On an earnings call Thursday, Comcast President Mike Cavanagh issued a Shocking news: The telecommunications giant is considering spinning off its cable networks into a new, publicly traded company. (NBC, an over-the-air, non-cable network, would not be part of the spinoff.)

The decision comes amid several simultaneous developments for profit-obsessed Comcast, whose media empire includes the entire NBCUniversal suite and several affiliated cable networks, including the Golf Channel. The first development is that Comcast’s long-term media growth exists in broadcast, not cable television. The second development is that Comcast hopes to further invest in Peacock, perhaps even partnering with another broadcaster (hello, Paramount!) to strengthen its broadcast position, and such a deal would be expensive. And the third development is the cable television business, which is at best in a period of steep decline and at worst in the early to mid stages of a death spiral.

(Without getting too far into the cable TV dilemma: streaming has caused many consumers to ditch cable, which has resulted in smaller cable TV audiences, which has resulted in fewer cable TV ad dollars and, more importantly , smaller “carriage fees” from network providers—all of which have caused cable network revenues to plummet and the cable television industry as a whole to begin a slow collapse in on itself.)

Considering all this – and Comcast CEO Brain RobertsHeavy emphasis on cash businesses — Comcast appears to be distancing its media business from cable networks. A spinoff company would allow Comcast to offload its cable networks, mitigating the risk of an underperforming business in Comcast’s larger business portfolio and positioning Comcast to raise capital by selling equity in the new company to investors. external.

While the Golf Channel was not explicitly named as part of a potential spinoff, it is 1) a cable network and 2) owned by Comcast. But the suggestion of a spinoff raises its own set of questions for Comcast and Golf Channel, as…

BULLETIN

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IS THE GOLF CHANNEL WORTH IT?

If Comcast’s decision is being driven by the collapse of the cable TV market, then surely it also understands the value of live sports programming, which is the last bastion of the cable TV monetization business. Even today, cable networks like ESPN and TNT have kept their businesses afloat thanks to the generous audiences garnered by their live sports properties. (Another quick aside: bigger, more consistent audiences equal better advertiser dollars and bigger carrier fees from providers, which equals a healthier business.)

Considering Comcast’s obsession with cash-strapped businesses and Golf Channel’s positioning as a cable network with regular live sports, is it wise to spin off Golf Channel and the many hours of live golf programming it generates annually? ? I suspect the answer lies somewhere deep in an Excel spreadsheet.

WHAT HAPPENED TO THE PGA TOUR AGREEMENT?

It’s safe to say that NBC/Comcast is still on the hook for the $400 million a year it promised the PGA Tour through the end of the decade, even in the event of a spinoff. This is because a good part of value vessel of the PGA Tour/NBC deal is tied to NBC’s weekend national broadcast windows, while a much smaller portion is tied to Golf Channel’s remaining hours of tour coverage. It’s hard to see that arrangement measurably changing under new (or adjusted) Golf Channel ownership.

WHAT HAPPENS TO THE SPINOFF COMPANY AFTER IT IS CREATED?

At the moment no one knows, because the spinoff doesn’t even exist. But Cavanagh indicated that Comcast intends for the new company to be “well capitalized” — indicating that Comcast is likely to consider outside investors in exchange for equity.

Could the spin-off eventually lead to a sale of NBC’s cable network assets, including the Golf Channel? Would Comcast accept a godfather offer for the entire spin-off company? These options could fundamentally change Golf Channel’s long-term outlook.

CAN THE PGA TOUR SAVE THE GOLF CHANNEL?

This is purely speculative, and far-fetched, but we’ve heard whispers about the PGA Tour absorbing an equity stake in Golf Channel, if not outright control, for years.

On the one hand, it makes sense for the Tour to keep the sport’s cable network alive, especially considering how many hours of programming the Golf Channel absorbs each year and the value of studio shows such as Live From for golf’s greatest product. On the other hand, there is a business reason why NBC is considering offloading its cable networks first.

One (taken) argument in favor: The tour wouldn’t have to change much from the brand. In 2022, the Golf Channel logo was recommissioned to include a tribute to him The PGA Tour logo.