Comcast Execs Look To Sports To Transform NBCU's Entertainment Unit
Comcast execs feel that "ratings-grabbing sports" such as the Super Bowl and the Olympics are at the heart of a strategy to transform NBCU's entertainment unit into "a multimedia juggernaut that takes advantage of its parent's deep pockets, scale and digital know-how," according to Douglas Alden Warshaw of FORTUNE. When NBC secured rights to the next four Olympic games for $4.4B, it showed "just how high the stakes are" for Comcast Chair & CEO Brian Roberts, as the company "seeks to make a success of NBCU, and in the process validate his decision to merge the two companies into a content and distribution colossus." Under Comcast's control over the past 11 months, NBCU's revenue edged up 4% to $21.1B. But Comcast's "ambitions extend far beyond simply turning NBCU into a well-managed business." NBCUniversal President & CEO Steve Burke said, "Sports is how we're going to move forward with the rest of the company." Warshaw notes the company plans to "blanket Olympics coverage across all its digital platforms and existing channels." If Comcast's "big bet on sports pays off -- if it can woo viewers and advertisers, boost the fees its rivals pay to carry NBC sports, and come up with a slew of interactive services that keep consumers from cutting the cord -- the rest of NBC can expect to follow suit." Roberts "insists that he didn't overpay for the Games." He said, "This deal makes economic sense." NBCU not only has TV rights but "also controls all U.S. digital distribution of the Olympics on its own platforms." It is a "significant departure from" the days when former NBC Sports Chair Dick Ebersol was in charge. Digital was "almost an afterthought for Ebersol, either because he didn't think the online audience was big enough -- or feared cannibalization" (FORTUNE, 3/19 issue).