Think the TV business is in trouble? Don't tell Comcast. NBC and its associated properties haven't had the greatest run of success since Comcast initially announced a deal to buy 51 percent of NBC Universal (which went through in 2011), but the cable company has decided to double down on its investment, acquiring General Electric's remaining 49 percent of NBC Universal well ahead of GE's planned divestiture of the stock (which would have started in July 2014). The magnitude of this deal's astounding, as Comcast will pay GE approximately $16.7 billion for the remaining shares and will be borrowing $5.3 billion of that through various methods. Why would they want to do this in a period where conventional broadcast TV's under assault from all corners and the NBC flagship itself has been hit hard lately? Well, a lot of it probably has to do with sports.
See, what's particularly interesting about the NBC flagship is that they went from the punchline of everyone's jokes to the only traditional network with really positive ratings news at January's Television Critics Association press tour, and that rise had a lot to do with sports. Specifically, Sunday Night Football and Olympic coverage were key parts of what helped the network post big gains. NBC had a few successes beyond that, of course, in particular The Voice and Revolution, but Sunday Night Football's dominance was probably the biggest factor in the network's rise, and the Olympics did even better than many expected. Despite heavy criticism over their tape-delay strategy, NBC pulled solid ratings and turned a small profit on the London Games, and they're expecting to make money off Sochi in 2014. Things are looking up for them on the sports front, too; sure, nothing draws like the NFL, and it isn't back for months, but the NHL is now back and has pulled remarkable ratings thus far. That should help both the NBC mothership and NBC Sports Network, which could definitely use the assistance thanks to struggling ratings and growing, ambitious competition.
When you look at NBC Universal as an asset (and it's a big one, comprising everything from Oxygen to SyFy to Universal Parks and Resorts), it's the sports programming front that seems the most valuable, especially for the flagship. Yes, reality programs like The Voice are still drawing viewers, and the occasional show like Revolution will turn into a hit, but this is also the network that recently aired "the lowest-rated scripted premiere in the history of the Big Four networks" (Do No Harm, which was cancelled after just two airings.) They don't have a lot of big properties to build on outside of the sports front, and they may have to start almost completely from scratch this fall.
Moreover, there's more and more competition for audiences these days, with specialty channels like HBO, AMC and FX delivering their own compelling programming and other outlets like Netflix getting into the game (which could really disrupt things for traditional broadcasters). NBC Universal actually competes with itself here, too, as their specialty channels are definitely drawing some viewers away from traditional network programming. What's attractive about sports, though, and about big-ticket items like Sunday Night Football, the Olympics and the recently-acquired English Premier League rights in particular, is that it still represents destination, somewhat DVR-proof programming. You can still get a lot of people to watch a Sunday Night Football game (and the ads aired within it) live, and that's a very attractive property for advertisers.
Does that make this a logical move for Comcast? Well, that's tough to tell without knowing the specifics of the balance sheets here; there's so much involved in NBC Universal that it's difficult to predict exactly what's making and losing money. It's certainly a risky move, though, especially when you consider how much Comcast is borrowing to get this done. From this corner, it sure looks like one of the big selling points of NBC Universal at the moment is its sports content, and the value of that would seem likely to continue to rise. We'll see how that does in relation to NBC Universal's other properties. Oh well, at least Comcast won't have to worry about Jack Donaghy tanking the network any more…