NBCUniversal looks at sports ahead of ‘legendary February’

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NBC is about to have a “legendary” month.

“Legendary February”, a marketing slogan coined by Jenny Storms, NBC’s chief marketing officer, relates to sports that will be broadcast by NBCUniversal, the subsidiary of Comcast. The Milan Cortina Winter Olympics begin on February 6 with the opening ceremonies. This will air on NBC, followed by a two-week series of Olympic programming.

Just two days after Olympic coverage begins, NBC will air the Super Bowl, and a week later the network will air the NBA All-Star Game, a product of the NBA’s new media rights deal that began this season. The Olympics end on February 22, and NBC won’t just broadcast the closing ceremonies — it will also show the Boston Celtics against the Los Angeles Lakers that night.

All major events will be broadcast on NBC and its subscription streaming service, Peacock.

That doesn’t even include the FIFA World Cup, which will air this summer on NBCU’s Telemundo, or Major League Baseball, which returns to NBC in March after a three-year hiatus.

Hosting high-profile sporting events will be a major test for NBC after spending billions of dollars to acquire broadcast rights. ROI is judged by a mix of ad revenue sold for the events, plus the distribution value added by making NBC a must-have component of any pay TV package, plus the value those events have for its Peacock streaming service in terms of adding and maintaining monthly subscribers.

February is a microcosm of the company’s strategy these days – and a notable turning point for the media company in recent years. Although Comcast co-CEO Mike Cavanagh says he disagrees, it’s hard to argue otherwise: NBC has become a sports-first entity.

Sports have been a major component of NBC for decades, but they weren’t the network’s calling card. In the 1990s, NBC stood for “Must See TV,” anchored by the hits “Seinfeld,” “Friends,” “Frasier” and “ER.”

That series endured into the early 2000s, with another string of hits led by “The Office,” “The West Wing,” “Friday Night Lights” and “This is Us,” as well as critical darlings such as “30 Rock,” “Parks and Recreation,” “Community” and “The Good Place.”

NBC has also historically had success with its morning shows (“Today”), news programs and late-night shows (“Saturday Night Live,” “The Tonight Show”), but ratings have fallen for all of those entities as tens of millions of Americans have canceled traditional pay TV over the past 15 years.

Massive cord cutting has of course led to significant change in the media industry. With the property of Discovery of Warner Bros. still in limbo while Paramount Skydance And Netflix jostled for control, NBC suddenly appears subscale.

Netflix, Amazon, Apple And Google/YouTube have balance sheets that significantly dwarf NBCUniversal’s purchasing power (at least, if these companies choose to spend on television programming).

Disney has a market valuation of $200 billion, far more than NBCU, which is just a division of Internet giant Comcast, whose total market cap is just over $100 billion. And NBCU is consciously becoming smaller, having spun off its entire portfolio of cable networks (including CNBC) other than Bravo.

NBC once competed with ABC, CBS, Fox and a handful of basic cable networks like TNT, FX and TBS for scripted entertainment. Those days are over. Competition has morphed to include tech streaming giants, and NBC’s portfolio and global reach are simply dwarfed by those of larger rivals.

“You look at where the competition is coming from, at least in the latest media, it’s on the entertainment side,” Rick Cordella, head of NBC Sports, told CNBC in a recent interview. “For scripted drama, you see Apple, Netflix and Amazon producing fantasy dramas and other shows. Sports is harder. Sports is about relationships. Sports is a production. Sports is a broadcast reach. And so we have a little advantage in the sports category that we maybe don’t quite have in others.”

That’s not to say that NBCUniversal can’t invest in scripted television at all. The company recently signed “Yellowstone” creator Taylor Sheridan to a five-year deal that begins in 2029 and is worth about $1 billion, according to the Wall Street Journal.

NBC has also hit some home runs with unscripted TV shows, including “The Voice” (which averaged more than 4 million viewers in its 28th season), “America’s Got Talent” and Peacock’s “Love Island USA.” Over the summer, “America’s Got Talent” was the highest-rated show, and the seventh season of “Love Island USA” was the most-watched streaming reality show for nine straight weeks. “The Voice” is the highest-rated unscripted series of the last six seasons.

But NBCU probably no longer has the cash flow relative to the competition to outbid its rivals on a certain number of expensive shows each year without losing money. Peacock is still losing money, unlike streaming services like Netflix, Disney+ and HBO Max.

That’s why Comcast wanted to buy WBD’s studio and streaming assets, including HBO Max, and merge them with NBCU.

NBC decided to get into sports to keep the pay TV package afloat while increasing Peacock subscriptions for those who opted out of cable. Most of the audience for scripted entertainment – ​​easy to watch on demand – has gone to streaming.

And yet, Cavanagh disagreed that sports had become NBC’s main attraction.

“I wouldn’t say that,” the recently installed co-CEO said in an interview. “Have you watched ‘Stumble’? Have you watched ‘St. Dennis [Medical]’? We don’t want to be a purely sports service. That’s not the plan.

“I want the sports team to kill it. I want them to feel like they’re the center of the world. I want them to go out to the sports media audience and say, ‘We’re the special thing,'” Cavanagh said. “But if we’re sitting in Los Angeles talking to [NBCUniversal Entertainment and Studios] Donna [Langley] Or [TV Studios Chairman] Perlena [Igbokwe] Or [Bravo & Peacock Unscripted Chairman] Frances Berwick on the reality side with Bravo – we have special DNA in all these places, and they all deliver what the service does today. »

Cavanagh has a job to do. He’s the head of all divisions at NBC and, of course, he loves all of his children equally.

Still, just follow the money. NBC’s primetime lineup is its lightest in its history on scripted comedies and dramas. “Stumble” is currently the 17th most popular show on NBC (and about 75th overall on television), averaging about 1.5 million viewers each week, according to Nielsen figures. “St. Denis Medical” averages about 2.4 million viewers per week.

Those numbers are about what NBC gets for a weekly NBA game, but NBC just agreed to spend about $2.5 billion a year on the NBA. The All-Star Game and NBA playoffs will attract far more viewers than a standard regular season game.

“Sunday Night Football” averaged 23.5 million viewers per game this year. That costs NBC about $2 billion a year — a figure that will certainly skyrocket if and when the NFL renegotiates those rights, which could happen as early as this year.

Over the past year, NBC has managed to outbid its competitors for the NBA and MLB’s “Sunday Night Baseball” broadcast.

Two years ago, NBC paid $110 million for a Peacock-exclusive NFL wild card game. The logic at the time was to spend big on a marquee sporting event and hope that customers would continue to subscribe to Peacock after finding its library of original movies and TV series.

Over the past year, this strategy has evolved a bit. Now, instead of hoping sports fans will stick around to watch Peacock entertainment, NBC has acquired the NBA and MLB rights. It probably makes more sense to bet that an NFL fan will stick around to watch exclusive NBA and MLB games rather than continue paying $10.99 each month to watch “St. Denis Medical” or “Stumble.”