NBCSN Is the First Sports TV Casualty of the Streaming Era

NBCUniversal’s Friday announcement that it will shutter NBCSN by the end of the year prefigures the inevitable shift to place more top-tier sports content on its new Peacock streaming service.

The basic-cable channel, which launched in 1995 under the Outdoor Life Network banner, currently reaches 79.9 million subscribers. NBC Sports tipped its hand last year, when it quietly decided not to secure carriage extensions with the nation’s second-largest cable operator, Charter Communications. At the end of the third quarter, Charter boasted 16.2 million TV subscribers, trailing only NBC parent Comcast (20.1 million).

Before NBC Sports begins to move a significant portion of NBCSN’s NHL and NASCAR coverage over to the direct-to-consumer Peacock platform, it will take advantage of the superior reach of another of its linear TV networks. The mixed-use cable channel USA Network, which carries original dramas, reality shows and syndicated programming, also serves as an ancillary outlet for NHL games when scheduling conflicts arise and has functioned as a back-up for NBC’s Olympics coverage.

The consolidation of in-house assets is consistent with the erosion of the cable TV subscriber base and the ongoing evolution of the USA brand. Once the purveyor of basic-cable’s highest-rated homegrown dramas (among the biggest hits were Mr. Robot, Burn Notice, Psych and Suits), USA has been moving out of the pricey scripted space in favor of the far less expensive reality genre.

USA is a far bigger bread-winner for the company than is NBCSN, as it brings in approximately $1.65 per sub per month in carriage fees. That works out to some $1.7 billion in annual affiliate revenue. NBCSN’s much lower fee ($0.45/sub/month) and smaller distribution footprint adds up to a yearly haul of $431.5 million.

The beefed-up distribution of USA could help draw a bigger crowd to NBC’s hockey and auto-racing properties. USA closed out 2020 ranked 20th among all ad-supported cable networks, with a nightly audience of 902,000 viewers, while NBCSN finished tied for 64th place with an average delivery of 245,000 primetime viewers. NBCSN’s ratings were understandably diminished by the four-month sports hiatus.

NBC Sports Group chairman Pete Bevacqua informed staffers that NBCSN operations would be discontinued at the conclusion of 2021. “We have decided that the best strategic next step for our Sports Group and the entire Company is to wind down NBCSN completely, with key elements of NBCSN’s programming moving to USA Network and, in some cases, Peacock for 2022 and beyond,” Bevacqua wrote.

While the clock is ticking on the NBCSN asset, the channel will remain up and running throughout the 2021 Tokyo Summer Olympics.

Bevacqua did not provide guidance as to where NBCSN’s English Premier League coverage would land, saying only that “USA Network will begin carrying and/or simulcasting certain NBC Sports programming, including NHL Stanley Cup Playoff games and NASCAR races, as part of a larger transition within the company.”

NHL commissioner Gary Bettman declined to comment on the matter. The league is looking to carve out a new media rights package, one that is expected to put an end to NBC Sports’ long exclusivity.

Bevacqua also omitted the Tour de France from his remarks, even though the storied bicycle race has been a fixture on NBC’s cable lineup for more than 25 years. While the current rights deal expires in 2023, should NBC choose to renew with the Tour, Peacock is as good a place as any for its post-NBCSN coverage. In recent years, the company has remanded the bulk of its live race coverage to the legacy streaming platform, NBC Sports Gold.

As of last month, Peacock has signed up 26 million subscribers since its soft launch to Comcast customers on April 15. NBCU CEO Jeff Shell last summer told investors that the company in the not-so-distant future would begin restructuring its operations around the streaming model.

In August, or just weeks after Shell talked up the impending re-org, NBCU began the process of laying off nearly 3,500 employees, a culling that resumed in November. It is unknown how many NBCSN staffers may be repositioned with other in-house platforms once the network is shut down.

The transition, combined with our robust portfolio of assets … puts us in an even stronger position as leaders in the sports media space,” Bevacqua concluded. The NBC Sports boss will hold a virtual meeting with staffers next Tuesday to further discuss the developments.

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