What is Golf Channel’s future for NBC? Comcast’s announcement raises questions

Welcome back to another extended edition of the Hot Mic newsletter, GOLF’s weekly submission covering all things golf media from me, James Colgan. The subject of this week’s newsletter is a surprising earnings announcement from NBC/Golf Channel owner Comcast. As always, if you want to be the first to receive exclusive information like this directly from me, click on link here to subscribe to our free send newsletter. But first, let’s work the lines back to Comcast’s latest earnings call.

BIG NEWS COMCAST

In an earnings call on Thursday, Comcast Chairman Mike Cavanagh released a shocking news: The telecom giant is considering spinning off its cable networks into a new, publicly traded company. (NBC, an over-the-air rather than cable network, would not be part of the spin-off.)

The decision comes amid several concurrent developments for earnings-obsessed Comcast, whose media empire includes the entire NBCUniversal suite and several associated cable networks, including the Golf Channel. The first development is that Comcast’s long-term media growth exists in streaming, not cable TV. The second development is that Comcast hopes to invest more in Peacock, perhaps even partnering with another streamer (hello Paramount!) to strengthen its streaming position, and such a deal would be expensive. And the third development is the cable television business, which is at best in steep decline and at worst in the early to mid-stages of a death spiral.

(Without getting too much into the cable TV dilemma: streaming has caused many consumers to cut the cord, which has led to lower cable TV audiences, which has led to fewer ad dollars on cable TV, and in essentially, to lower “carriage fees” from network providers—all of which caused cable network revenues to decline and the cable industry as a whole to begin a slow collapse of its own.)

Given all this — and Comcast CEO Brain Roberts‘ strong focus on cash-positive businesses – Comcast appears to be distancing its media business from cable networks. A spin-off company would allow Comcast to offload its cable networks, mitigating the risk of a weak business on Comcast’s larger business portfolio and positioning Comcast to raise capital by selling equity in the new company to outside investors.

While the Golf Channel has not been explicitly named as part of a potential spin-off, 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 the Golf Channel, such as…

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IS THE GOLF CHANNEL NEWSWORTHY?

If Comcast’s decision is driven by the collapse of the cable television market, then surely it also understands the value of live sports programming, which is the last bastion of the profitable business in cable television. Even today, cable networks like ESPN and TNT have kept their businesses afloat thanks to the large audiences their live sports properties draw. (Another quick aside: larger, more stable audiences equal better dollars for advertisers and higher shipping fees from vendors, which means a healthier business.)

Given Comcast’s obsession with cash-positive businesses and Golf Channel’s positioning as a mainstream live sports cable network, is it wise to divest Golf Channel and the many hours of live golf programming it generates per year? I suspect the answer lies somewhere deep in an Excel spreadsheet.

WHAT HAPPENS TO THE PGA TOUR OFFER?

It’s safe to say that NBC/Comcast is still on the hook for the $400 million a year it promised the PGA Tour through the end of the decade, even with a spin-off. This is because a good part of value of the PGA Tour/NBC deal is tied to NBC’s national weekend broadcast windows, while a much smaller portion is tied to Golf Channel’s remaining hours of Tour coverage. It’s hard to see the deal measurably changing under new (or adjusted) Golf Channel ownership.

WHAT HAPPENS TO THE SPINOFF COMPANY AFTER IT IS CREATED?

Right now nobody knows, because the spinoff doesn’t even exist. But Cavanagh indicated that Comcast intends for the new company to be “well capitalized” — indicating that Comcast would likely consider outside investors in exchange for equity.

Could the spinoff eventually lead to a sale of NBC’s cable network assets, including the Golf Channel? Would Comcast accept a godfather offer for the entire spin-off company? These options could fundamentally change Golf Channel’s long-term outlook.

COULD THE PGA TOUR SAVE THE GOLF CHANNEL?

This is purely speculative and far off, but we’ve heard whispers of the PGA Tour absorbing a stake in Golf Channel, if not outright control, for years.

On the one hand, it makes sense for the Tour to keep the sport’s cable network alive, especially given how many hours of programming the Golf Channel absorbs each year and the value of studio shows like Live From to the biggest pro golf product. On the other hand, there is a business reason why NBC is considering offloading its cable networks in the first place.

A (silly) argument in favor: The Tour shouldn’t change branding too much. In 2022, the Golf Channel logo was recommended to include a tribute PGA Tour logo.