The worst kept secret in media M&A is finally confirmed. Comcast will purchase a majority stake in NBC Universal.
This is very good news for the IRL because it virtually ensures that Versus will be carried everywhere and by everyone (including DirecTV). Comcast will bundle Versus with more popular cable networks such as USA, CNBC and MSNBC. DirecTV can not seriously consider removing those channels from its lineup. Therefore, it will be forced not only to carry Versus, but also to assign the IRL's fledgling cable partner a decent channel number.
Translation: Comcast is prepared to spend $13.75 billion in order to acquire bargaining power with regards to negotiations with its customers and suppliers. Conversely, the IRL is preparing to select yet another single IndyCar chassis, thereby forfeiting its own bargaining power and that of its teams. The IRL will likely make the same mistake with regards to engine selection.
The IRL could learn something from its television partner. Regrettably, history suggests strongly that it will not.
Roggespierre
I understand were you're going with this being a positive step for Indycar, but if NBC really cared about Indycar they would've stepped up and made an offer for the 5 race package to broadcast the Indy 500 and four other races through 2012, like ESPN/ABC eventually did for 4 million dollars a year to retain the rights.
ReplyDeleteUntil proven otherwise, I'll remain skeptical of their motives and how they plan to benefit Indycar, if at all.
Roggespierre said... "This is very good news for the IRL because it virtually ensures that Versus will be carried everywhere and by everyone (including DirecTV). Comcast will bundle Versus with more popular cable networks such as USA, CNBC and MSNBC. DirecTV can not seriously consider removing those channels from its lineup"
ReplyDeleteThe irony is... DirecTV replaced Versus with NBC-owned Universal Sports!
Damon said...
"I understand were you're going with this being a positive step for Indycar, but if NBC really cared about Indycar they would've stepped up and made an offer for the 5 race package to broadcast the Indy 500 and four other races through 2012"
NBC spends all of their sports dollars in three places, and three places only. The Olympics, Notre Dame Football and Sunday Night (NFL) Football. They spend so much money on these three properties, EVERYTHING ELSE sports-related they broadcast is a time buy. There is simply no more money left in the cupboard.
In fact, they rely on the profits of these time buys (ALMS, Gravity Games, Beach Volleyball) to help pay for the three properties mentioned above.
So, it was not a matter of NBC not wanting the Indy 500. It was a matter of there being no money to pay for it.
It may also mean that IRL and other events will become pay per view. If no money is in the cupboard, then the cash has to come from somewhere!If that happens, then watch the ratings drop! Who is going to PAY for this product?
ReplyDeleteGuys,
ReplyDeleteThis deal is a game-changer. The question is whether or not the IRL will produce a product that is popular enough in the U.S. to keep it in the game.
Sports are at the heart of this deal. Comcast recognized that it was not going to be able to chip away at the ESPN juggernaut. Comcast needed bargaining power - multiple outlets, prime channel positioning, etc. - if it was to have a chance to compete.
The bad news for the IRL is that the stakes have been raised significantly. Comcast isn't investing almost $14 billion in order to be a bit player. It's going to compete with ESPN for top programming - NFL, college football and basketball, PGA, NBA, MLB and NASCAR.
Versus is happy with the IRL right now because the league arranges for significant ad purchases by Izod and APEX Brasil. The deal is a glorified time buy.
Going forward, Versus will do less and less of this sort of thing. It's going to want serious numbers that allow it to jack-up the rates it charges to distributors like DirecTV and Time Warner.
The NBC Broadcast Network is an albatross. I doubt that Comcast even knows what it plans to do with it. The revenue is ALL on the cable side. That said, Comcast can leverage NBC's superior reach to attract larger sports properties.
IndyCar MUST step up its game. It must demonstrate growth in U.S. TV viewership. If it does, then it will be able to grow along with Comcast/NBC Sports. If it does not, then it's going to find that its formerly enthusiastic cable partner is moving on to bigger and better things.
Best Regards,
Roggespierre
R:
ReplyDeleteI don't think the deal includes the NBC free-air broadcast programming. I think it just covers the stuff that NBC Universal(NBC-U) now provides to cable outlets with exception of NBC Sports and NBC News (still free-air). NBC-U will now have the muscle to take on ESPN and ESPN on ABC for sports programming. Don't forget that NBC Sports has the exclusive rights to Notre Dame football and the Olympics(as of now).
FTA: "Comcast Corp. announced Thursday it plans to buy a majority stake in NBC Universal for $13.75 billion, giving the nation's largest cable TV operator control of the Peacock network, an array of cable channels and a major movie studio."
ReplyDeleteLooks like it includes the whole shootin' match. I'm not sure I'm impressed from an IndyCar standpoint. I don't see NBC plumping for what amounts to a series supporting an ABC/ESPN product in the 500. NBC let NASCAR go a few years ago to go after NFL Sunday night football. If NBC has a competitor/mirror to Versus, one wonders whether one or the other goes dark, likely Versus.
I hate to rain on the parade, but none of us really knows how this deal will affect the ICS. It could be good news in terms of reach, it could be terrible news in terms of raising the bar on a ratings threshold and associated value. A couple of things are sure: asserting that the cupboard is bare is silly (first I don't just accept that assessment without an authoritative source) because the deal changes everything including resourcing. Another thing we know is that the deal includes every piece of NBC content without exception. We can throw a lot of numbers around from news reports but its just speculation. This will play out over the next couple of years.
ReplyDelete