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Is the VERSUS Network about to become a worthy competitor to ESPN? Would sports fans, leagues, cable and sat providers benefit from a merger of NBCU and Comcast? The most recent speculation surrounding the sale of NBCU revolves around comments by Vivendi CEO Jean-Bernard Levy, reiterating Vivendi’s desire to divest themselves of their 20% stake in NBCU.

Those who are doubtful that this deal will happen frequently point to the negative reaction the rumoured deal has met with from the market. In 2004, Comcast failed to acquire a different media giant, Walt Disney Co. (which includes ESPN and ABC), a potential deal that engendered the same negative reaction.

Earlier the WSJ reported on the battle between TV networks and cable operators over carriage fees. Cable channels (including ESPN) have been outperforming “over the air” channels because of their “dual revenue stream” of advertising and carriage fees. As ad rates decline, CBS has successfully negotiated some deals for carriage fees and News Corp. (Fox) is seeking the same. In some markets, local TV stations are threatening to withhold their “over the air” signals from cable companies if a resolution is not found. If Comcast acquires NBCU, the WSJ reports that the stakes will rise in the “fees for carriage” dispute.

Assuming the deal is concluded (far from certain), how would the sports industry react to VERSUS attempt to compete with ESPN? Last year when ESPN acquired the rights to the BCS, in the process obliterating any competing bid, many wondered if it was proof that ESPN could and would own the rights to any and every sports property that they wished. Did the ESPN/BCS deal hammer home the message that the ad supported “over the air” model will never compete with the “dual revenue stream” cable for sports rights?

A much more robust VERSUS could provide sports properties a welcome alternative to ESPN. Currently, if a sports property is not a partner with ESPN, they get less “play” from the ESPN multi media giant. The NHL, formerly an ESPN partner and a current partner of both VERSUS and NBC, has complained that their exposure on ESPN’s flagship “SportsCenter” has diminished significantly since their rights deal was not renewed.

Along with sports properties, the cable and sat providers might embrace a legitimate rival to ESPN. These industries have long been unhappy with the cost of sports programming. Disputes over “sports tiers” and carriage fees have been widespread. At $4.00 per subscriber, ESPN is easily the most expensive cable channel. By comparison, VERSUS currently charges $0.20 to $0.25 per sub.

In the larger scheme, VERSUS is likely a small consideration in the discussed NBCU/Comcast deal. Should it happen, the affects on sports fans, sports properties, MSOs and ESPN will be interesting to watch. Fairly or not, there is considerable enmity in the sports industry towards ESPN, who justifiably argue that they should not be criticized over their staggering success. If VERSUS doesn’t answer the call to challenge the WWL, how long until somebody else rises to the challenge?

http://www.sportsbusinessjournal.com/article/63955

It’s looking more likely that Comcast will be successful in its attempt to take control of NBC, judging by a series of meetings the two sides have had over the past few weeks.

Toward the end of October, the top executives from NBC and Comcast — including NBC’s Jeff Zucker and Dick Ebersol and Comcast’s Steve Burke and Jeff Shell — gathered for two days of secret meetings in New York, sources told me.

Each cable channel owned by the two entities, from SyFy to Golf Channel, gave a presentation to the assembled executives, highlighting budgets, programming rights and broadband strategies.

The executives didn’t come to any sweeping conclusions. But the mere fact that these top executives spent two days on them illustrates how much both sides want the deal to be completed.

There are three things Comcast needs to do to ensure that the deal, which its executives internally refer to as “Project Crimson,” is a success from a sports media standpoint.

Comcast needs to retain Ebersol.

It’s a no-brainer that Comcast wants to keep Ebersol. But it might not be easy. Ebersol has a lot of autonomy overseeing NBC Sports right now. Comcast has to make sure that doesn’t change for the longtime television executive.

Comcast needs Ebersol for all sorts of reasons, but in large part because of his Rolodex. Ebersol has deep relationships with the Olympics and the U.S. sports leagues, which is essential if Comcast is serious about growing Versus.

Ebersol also would improve the production quality of Comcast’s sports networks. In April 2008, Comcast hired former NBC Sports producer Michael Weisman as a consultant to improve the on-screen look of its sports networks: Versus, Golf Channel, the Mtn. and its suite of Comcast SportsNets. Weisman is no longer with Comcast, but the need to improve program quality remains.

That’s where Ebersol comes in. He can tell stories through captivating images. His game production, particularly with the Olympics, is second to none. If Ebersol stays on board to oversee sports content, it will give much more credibility to Comcast’s sports networks.

Comcast needs to see which sports it can share with NBC.

The combination of a broadcast network paired with cable sports channels presents the best opportunity for Comcast to develop a credible alternative to ESPN.

The key to making that happen is to share sports programming between NBC and Versus/Golf Channel. While some NBC sports programming, like “Sunday Night Football,” will stay exclusive to the network, other programming could be shared with Versus or Golf Channel.

The Olympics are an obvious choice, since NBC already spreads Olympic programming across its cable networks.

But Comcast also has its sights set on Notre Dame football. Sources said NBC’s deal with the Fighting Irish has a clause that allows a certain number of games to migrate to cable. Versus would be a natural place to house those games.

Versus also could have the right to re-air NBC’s Notre Dame games. And it could roll out pre- and postgame shows around them. In June 2008, NBC signed a five-year extension for Notre Dame’s home football games, a deal that extends through the 2015 season.

Comcast should consolidate its RSNs with NBC O&Os.

NBC owns broadcast affiliates in four markets where Comcast operates regional sports networks: Chicago, Philadelphia, San Jose and Washington.

If the deal goes through, I expect Comcast to merge those stations in each of those markets, allowing them to share studio space and on-air talent. There are obvious cost savings; Comcast doesn’t need two production studios in these markets. But Comcast’s RSNs would benefit from having high-profile local sports talent appear on their channel.

Whether the Comcast/NBC deal will pass regulatory muster in Washington is a question for another column. Governmental agencies, like the Federal Communications Commission and the Federal Trade Commission, are certain to scrutinize the deal closely, a process that could take as long as a year.

But right now, I’m guessing that the two will finalize a deal within the next few months.