What’s Golf Channel’s NBC future? Comcast announcement raises questions

Welcome again to a different prolonged version of the Sizzling Mic E-newsletter, GOLF’s weekly ship overlaying all issues golf media from me, James Colgan. The subject of this week’s publication is a shocking earnings name announcement from NBC/Golf Channel proprietor Comcast. As at all times, when you’d prefer to be the primary to obtain unique insights like these straight from me, click on the hyperlink right here to subscribe to our free publication ship. However first, we work the telephone strains again to Comcast’s newest earnings name.

BIG COMCAST NEWS

In an earnings name Thursday, Comcast president Mike Cavanagh launched a stunning bit of reports: The telecom big is contemplating spinning off its cable networks into a brand new, publicly traded firm. (NBC, an over-the-air broadcast community quite than cable, wouldn’t be a part of the spinoff.)

The choice comes from a number of concurrent developments for earnings-obsessed Comcast, whose media empire consists of the complete NBCUniversal suite and several other related cable networks, together with Golf Channel. The primary growth is that Comcast’s long-term media development exists on streaming, not cable tv. The second growth is that Comcast hopes to speculate additional into Peacock, maybe even by partnering with one other streamer (howdy, Paramount!) to solidify its streaming place, and such a deal could be costly. And the third growth is the cable TV enterprise, which is at greatest in a interval of steep decline, and at worst within the early-to-middle levels of a demise spiral.

(With out getting too deep into the cable-TV dilemma: streaming has prompted many customers to cord-cut, which has prompted smaller cable TV audiences, which has resulted in fewer promoting {dollars} on cable TV and, crucially, smaller “carriage charges” from suppliers to networks — all of which has prompted cable community revenues to plummet and the cable TV trade at giant to start a gradual collapse unto itself.)

Contemplating all of this — and Comcast CEO Mind Roberts‘ heavy emphasis on cash-positive companies — Comcast seems to be distancing its media enterprise from cable networks. A by-product firm would enable Comcast to dump its cable networks, mitigating the danger of a low-upside enterprise on Comcast’s bigger enterprise portfolio and positioning Comcast to boost capital by promoting fairness within the new firm to exterior buyers.

Whereas Golf Channel wasn’t named explicitly as a part of a possible spinoff, it’s 1) a cable community and a pair of) owned by Comcast. However the suggestion of a derivative raises its personal set of questions for Comcast and Golf Channel, like…

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IS GOLF CHANNEL WORTH SPINNING OFF?

If Comcast’s resolution is being pushed by the collapse of the cable TV market, then it certainly additionally understands the worth of stay sports activities programming, which is the final bastion of moneymaking enterprise in cable TV. Even at present, cable networks like ESPN and TNT have saved their companies afloat due to the beneficiant audiences earned by their stay sports activities properties. (One other fast apart: bigger, extra steady audiences equal higher advertiser {dollars} and bigger carriage charges from suppliers, which equals a more healthy enterprise.)

Contemplating Comcast’s obsession with cash-positive companies, and Golf Channel’s positioning as a cable community with common stay sports activities, is it sensible to spin off Golf Channel and the numerous hours of stay golf programming it generates per yr? I believe the reply lies someplace deep in an Excel spreadsheet.

WHAT HAPPENS TO THE PGA TOUR DEAL?

We will say safely that NBC/Comcast remains to be on the hook for the $400ish million per yr it has pledged to the PGA Tour by means of the top of the last decade, even within the occasion of a derivative. It’s because a superb chunk of the worth of the PGA Tour/NBC settlement is tied to NBC’s weekend nationwide broadcast home windows, whereas a a lot smaller chunk is tied to Golf Channel’s remaining hours of Tour protection. It’s laborious to see that settlement altering measurably beneath new (or adjusted) Golf Channel possession.

WHAT HAPPENS TO THE SPINOFF COMPANY AFTER IT’S CREATED?

Proper now no one is aware of, as a result of the spinoff doesn’t even exist. However Cavanagh indicated Comcast intends for the brand new firm to be “well-capitalized” — which signifies Comcast would seemingly contemplate exterior buyers in trade for fairness.

May the spin-off finally result in a sell-off of NBC’s cable community belongings, together with Golf Channel? Would Comcast settle for a godfather supply for the complete spin-off firm? These choices may basically shift Golf Channel’s long-term outlook.

COULD THE PGA TOUR RESCUE THE GOLF CHANNEL?

That is purely speculative, and a good distance off, however we’ve heard whispers concerning the PGA Tour absorbing an fairness stake in Golf Channel, if not complete management, for years.

On one hand, it is smart for the Tour to maintain the game’s cable community alive, significantly contemplating what number of hours of programming Golf Channel absorbs every year, and the worth of studio reveals like Dwell From to the higher professional golf product. On the opposite, there’s a enterprise cause why NBC is contemplating off-loading its cable networks within the first place.

One (foolish) argument in favor: The Tour wouldn’t have to vary a lot of the branding. In 2022, Golf Channel’s emblem was recommissioned to incorporate an homage to the PGA Tour emblem.