NBC Sports Network Versus ESPN

Joel Anderson |

DIS, CMCSA, GE, NWSA, ESPN, NBC, NBCSN, sports network, cable sports, 24-hour, NBC Sports Network, ABC sports, Fox Sports, News Corp, Scott Van Pelt, Bob Costas, Rich Eisen, nicklas lidstrom, detroit red wingsESPN, owned by Disney (DIS), has dominated the world of 24-hour cable sports networks, earning the self-assigned title of the "Worldwide Leader in Sport." However, NBC, puchased from General Electric (GE) by Comcast (CMCSA) in early 2011, has now boldly stepped into competition with industry heavyweight ESPN. Versus, a network owned by NBC, has been rebranded as the NBC Sports Network, representing an effort to compete with ESPN for cable sports customers.

Versus Never Caught On

Versus never managed to carve out a space for itself in the world of cable sports, with NBC research detemining that less than half of television viewers had heard of Versus according to USA Today's Michael Hiestand. Now, NBC is hoping that the extra capital they bring to the table will allow the new, rebranded network to purchase rights to more major sporting events. Versus struggled to build viewership due in no small part to the relatively niche sports it was offering, including NHL hockey and the Tour De France.

"Versus is out and the NBC Sports Network, or NBCSN, is now in," says David Daniels in an article for bleacherreport.com. "Their first day with their new name, they’ll be forced to air a hockey documentary.  Why?  Because they don’t have contracts with leagues like the NFL and NBA to show their games. And that’s why NBCSN won’t be able to compete with ESPN."

However, NBC does have the rights to the 2012 Olympic games in London, a potential ratings juggernaut that could benefit the budding young NBCSN. The various cable networks of NBC have engaged in wall-to-wall coverage in the past, and now NBCSN appears poised to continue offering round the clock coverage for Olympic-philes this summer.

New Network May Poach Talent

One area where competition may sharply increase is in the talent arena. NBC already brings some big names to the table, with Bob Costas and Dan Patrick already under contract. However, expanding the audience of the new 24-hour sports channel may require bringing more notable personalities on board. Jason McIntyre of thebiglead.com reports that rumors are swirling regarding the pending end of ESPN anchor Scott Van Pelt's contract. Should NBC make an effort to lure Van Pelt away from ESPN, it could be precisely the sort of move that might help draw viewers to the new network. Says McIntyre:

"What’s the best way to immediately get in the discussion? Steal a big name from your would-be competitor. In 2003, the nascent NFL Network went in and grabbed ESPN’s Rich Eisen to become the face of the channel. Might the NBC Sports Network try to do the same by hiring ESPN’s Scott Van Pelt? That’s the rumor in media circles. One source says NBC is prepared to put the full court press on Van Pelt in the coming months. (His ESPN contract is up at the end of April.) Another source says ESPN is already bracing for the tug-of-war."

Can ESPN Rise to Challenge?

Perhaps what makes NBC's foray into the segment most interesting is the absence of competition for ESPN over time. While News Corp (NWSA) has a variety of sports networks under the Fox Sports brand, the focus has been on regional sports coverage and hasn't made a concerted effort to compete on a national scale with ESPN. Can ESPN continue to dominate when faced with a serious competitor for the first time? Can NBC pull away enough viewers with hockey, cycling, and the Olympics? Will it make significant bids on other major sports? Only time will tell, but in the short term, the landscape of cable sports has, at the least, become more interesting to follow.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CMCSA Comcast Corporation Class A Common Stock 66.34 0.09 0.14 10,567,846
DIS Walt Disney Company (The) 92.86 1.06 1.15 8,923,678
GE General Electric Co 29.62 0.09 0.30 36,119,540
HLF Herbalife Ltd. 61.99 0.49 0.80 1,155,480
NWSA News Corporation 13.98 0.09 0.65 3,181,043

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