Welcome back to another extended edition of the Hot Mic Newsletter, GOLF’s weekly send covering all things golf media from me, James Colgan. The topic of this week’s newsletter is a surprising earnings call announcement from NBC/Golf Channel owner Comcast. As always, if you’d like to be the first to receive exclusive insights like these directly from me, click the link here to subscribe to our free newsletter send. But first, we work the phone lines back to Comcast’s latest earnings call.
BIG COMCAST NEWS
In an earnings call Thursday, Comcast president Mike Cavanagh released a shocking bit of news: The telecom giant is considering spinning off its cable networks into a new, publicly traded company. (NBC, an over-the-air broadcast network rather than cable, would not be part of the spinoff.)
The decision comes from a few concurrent developments for earnings-obsessed Comcast, whose media empire includes the entire NBCUniversal suite and several associated cable networks, including Golf Channel. The first development is that Comcast’s long-term media growth exists on streaming, not cable television. The second development is that Comcast hopes to invest further into Peacock, perhaps even by partnering with another streamer (hello, Paramount!) to solidify its streaming position, and such a deal would be expensive. And the third development is the cable TV business, which is at best in a period of steep decline, and at worst in the early-to-middle stages of a death spiral.
(Without getting too deep into the cable-TV dilemma: streaming has caused many consumers to cord-cut, which has caused smaller cable TV audiences, which has resulted in fewer advertising dollars on cable TV and, crucially, smaller “carriage fees” from providers to networks — all of which has caused cable network revenues to plummet and the cable TV industry at large to begin a slow collapse unto itself.)
Considering all of this — and Comcast CEO Brain Roberts‘ heavy emphasis on cash-positive businesses — Comcast appears to be distancing its media business from cable networks. A spinoff company would allow Comcast to offload its cable networks, mitigating the risk of a low-upside business on Comcast’s larger business portfolio and positioning Comcast to raise capital by selling equity in the new company to outside investors.
While Golf Channel wasn’t named explicitly as part of a potential spinoff, it is 1) a cable network and 2) owned by Comcast. But the suggestion of a spinoff raises its own set of questions for Comcast and Golf Channel, like…
IS GOLF CHANNEL WORTH SPINNING OFF?
If Comcast’s decision is being driven by the collapse of the cable TV market, then it surely also understands the value of live sports programming, which is the last bastion of moneymaking business in cable TV. Even today, cable networks like ESPN and TNT have kept their businesses afloat thanks to the generous audiences earned by their live sports properties. (Another quick aside: larger, more stable audiences equal better advertiser dollars and larger carriage fees from providers, which equals a healthier business.)
