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

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

BIG COMCAST NEWS

In an earnings name Thursday, Comcast president Mike Cavanagh launched a surprising bit of stories: The telecom large is contemplating spinning off its cable networks into a brand new, publicly traded firm. (NBC, an over-the-air broadcast community fairly 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 all the NBCUniversal suite and a number of 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 take a position additional into Peacock, maybe even by partnering with one other streamer (hiya, Paramount!) to solidify its streaming place, and such a deal can be costly. And the third growth is the cable TV enterprise, which is at finest in a interval of steep decline, and at worst within the early-to-middle phases of a dying spiral.

(With out getting too deep into the cable-TV dilemma: streaming has induced many customers to cord-cut, which has induced 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 induced cable community revenues to plummet and the cable TV trade at massive to start a sluggish 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 permit Comcast to dump its cable networks, mitigating the chance of a low-upside enterprise on Comcast’s bigger enterprise portfolio and positioning Comcast to lift capital by promoting fairness within the new firm to outdoors traders.

Whereas Golf Channel wasn’t named explicitly as a part of a possible spinoff, it’s 1) a cable community and a couple of) owned by Comcast. However the suggestion of a by-product 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 dwell sports activities programming, which is the final bastion of moneymaking enterprise in cable TV. Even in the present day, cable networks like ESPN and TNT have saved their companies afloat due to the beneficiant audiences earned by their dwell 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 dwell sports activities, is it sensible to spin off Golf Channel and the various hours of dwell golf programming it generates per 12 months? I believe the reply lies someplace deep in an Excel spreadsheet.

WHAT HAPPENS TO THE PGA TOUR DEAL?

We are able to say safely that NBC/Comcast remains to be on the hook for the $400ish million per 12 months it has pledged to the PGA Tour via the tip of the last decade, even within the occasion of a by-product. It’s because a great 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 underneath 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 doubtless take into account outdoors traders in change for fairness.

Might the spin-off finally result in a sell-off of NBC’s cable community property, together with Golf Channel? Would Comcast settle for a godfather supply for all the spin-off firm? These choices might 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 in regards to the PGA Tour absorbing an fairness stake in Golf Channel, if not whole management, for years.

On one hand, it is sensible for the Tour to maintain the game’s cable community alive, notably contemplating what number of hours of programming Golf Channel absorbs annually, and the worth of studio exhibits like Reside From to the better professional golf product. On the opposite, there’s a enterprise purpose why NBC is contemplating off-loading its cable networks within the first place.

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