Comcast-NBC Merger Could Create Potential Competitor To ESPN

Comcast and GE officials “see the creation of a combined sports business as a key benefit” of a potential merger of Comcast's cable networks with GE's NBC Universal (NBCU), according to sources cited by Sam Schechner of the WALL STREET JOURNAL. Comcast Programming Group President Jeff Shell in June said that “expanding the sports business at his cable networks was the ‘top of our list over the next five years.’” Schechner notes if Comcast’s bid to control NBCU succeeds, it would advance Shell’s goal "overnight, creating a potential new rival” to ESPN. Paired with NBC, Comcast “could get a bigger slice of a large sports TV market,” as the expanded NBCU would combine both companies’ rights to college football, hockey and golf. It also would have NBC’s rights to the Olympics in '10 and '12 and NFL “SNF” games through '13. In addition, a deal would give NBC Sports “access to cable subscription fees, which would put it in a better position to keep up with growing sports-rights costs.” Comcast’s Versus and Golf Channel “already receive about $400[M] in yearly subscription fees.” Comcast also “could try to push paid distribution for NBC’s fledgling Universal Sports channel,” and a source said that Comcast could “put large swathes of Olympics footage” on its VOD service. Schechner notes if Comcast “succeeds in building a stronger sports business, the company and other cable operators might gain better leverage when negotiating the fees they pay ESPN.” Pilson Communications President Neal Pilson said, “If this merger goes through, they become a much, much stronger competitor to ESPN. And they threaten to dominate CBS and Fox” (WALL STREET JOURNAL, 10/12).