Tuesday, October 30, 2012

NBC Sports Aggressively Expanding

NBC Sports bid $250 million for the rights to broadcast the English Premier League for 3 years. They outbid Fox and ESPN, who currently hold the broadcasting rights for English soccer in America (source). It's the latest in a series of aggressive acquisitions by NBC Sports.

A few weeks ago they outbid Fox for the rights to broadcast Formula 1 racing in America. Formula 1 has niche appeal in the States, but is a global powerhouse. Forbes listed F1 driver Fernando Alonso as the 19th highest paid athlete in the world, with $32 million in earnings. His team, Ferrari, was ranked the 15th most valuable sports team in the world, between the Philadelphia Eagles and the Chicago Bears.

Both European soccer and Formula 1 have loyal but relatively small fanbases in the US. However there is significant room for growth. NBC is well situated to encourage and exploit that growth. Like ESPN, they have multiple channels at their disposal. They can reach a broad audience with their flagship NBC network, and a smaller but more concentrated viewership on NBC Sports. At night and on weekends, business-focused CNBC is essentially an idle channel, which NBC has already used to air Olympic and NHL coverage.

NBC's expansion isn't limited to small sports looking to grow, it includes established sports that already attract large audiences. The Big East recently decided to field open bids for the TV rights to its football games, instead of re-signing with ESPN. NBC Sports will compete with ESPN, as well as Fox, for those rights. NBC Sports currently hold the rights to Notre Dame football (this has been a good year for that contract), as well as the lower level Ivy League and CAA. They sub-license rights to Mountain West games from CBS Sports. If NBC snares the Big East, it would be a significant incursion into major college football.

NBC already possesses an arsenal of sports assets: Sunday Night Football, every third Super Bowl, the Olympics, horse racing's Triple Crown, and the NHL (which is unfortunately not taking advantage of NBC's growth campaign). They also broadcast second-tier sports such as Major League Soccer, the Golf Channel, IndyCar racing, and rugby.

And since 2011, when Comcast bought a majority share in NBC Universal, NBC Sports has controlled Comcast's network of regional sports channels. That includes 11 channels across the country focused on regional sports, including Comcast SportsNet Houston, which launched just a few weeks ago.

In the age of onDemand and DVRs, broadcasters and cable companies crave programming which people watch live, and therefore cannot skip commercials. Sports provide such content. NBC is determined to conquer as much territory in the lucrative sports landscape as it can. It might not challenge ESPN, at least not for a few years, but it does have an eye on CBS, and seems dead-set on hunting Fox.