Potential hope for IRL's anemic TV package Comcast Corp. executive Jeff Shell said at an industry conference in June that expanding the sports business at his cable networks was the "top of our list over the next five years."
If Comcast's bid to control NBC Universal succeeds, it would advance Mr. Shell's goal overnight, creating a potential new rival to Walt Disney Co.'s ESPN.
As the cable-TV giant and NBC Universal's parent, General Electric Co., work through details of a deal that would merge Comcast's cable networks with GE's NBC Universal, people close to the negotiations say the two companies see the creation of a combined sports business as a key benefit of a partnership.
The new company would marry Comcast's Versus and Golf Channel cable-sports networks and multiple regional sports networks with NBC Universal's broadcast-sports operation and rights to major sports events, including a Super Bowl and two Olympic games.
The talks seek to create a TV and movie company that would be 51% owned by Comcast, with GE holding the remainder. NBC Universal's current minority owner, Vivendi SA, would have its 20% stake bought out. Negotiations could still fall apart, but the merger appears to be the most likely outcome for NBC Universal, people familiar with the matter say.
Paired up with NBC, Comcast could get a bigger slice of a large sports TV market. Advertisers spent an estimated $10.6 billion for commercials in sports programming across U.S. broadcast networks, cable networks and local TV stations last year, out of total TV ad spending of about $68.4 billion, according to TNS Media Intelligence. Cable-sports channels raked in more than $9.2 billion of about $22.9 billion in basic-cable TV subscription fees for the year, according to estimates from SNL Kagan.
The expanded NBC Universal would combine both companies' rights to college football, hockey and golf. It would have NBC's rights to the Olympics in 2010 and 2012 and NFL games through 2013. A deal could also give NBC Sports access to cable subscription fees, which would put it in a better position to keep up with growing sports-rights costs.
Comcast's Versus and Golf Channel already receive about $400 million in yearly subscription fees, according to industry estimates. In addition, Comcast could try to push paid distribution for NBC's fledgling Universal Sports channel.
Among the possibilities for the combined company would be for Comcast to air football games simultaneously on multiple channels, with each offering different camera angles, a person familiar with the matter says. Comcast could also put large swaths of Olympics footage in its video-on-demand service, the person says.
"If this merger goes through, they become a much, much stronger competitor to ESPN. And they threaten to dominate CBS and Fox," says Neal H. Pilson, a sports-media consultant and former president of CBS Sports.
Spokesmen for ESPN and CBS both decline to comment. A spokesman for Fox says the company "has a big event sports strategy nationally, and we don't see that changing." Fox Sports and The Wall Street Journal are owned by News Corp. WSJ.com