Sports fuel growth for NBCUniversal’s Peacock streaming service

NBCUniversal’s sports portfolio has been driving growth at its streaming service Peacock, and the company remains committed to securing additional sports rights deals.

Sports present both challenges and opportunities for media companies in an era of cord cutting and the quest for profitability in streaming services.

While traditional cable TV bundles have relied on live sports content to retain customers, these bundles are shrinking while becoming more expensive for media organizations. However, the same live sports content is fueling the growth of streaming services like Peacock and Paramount+.

Comcast, the parent company of NBCUniversal, recently announced that Peacock’s customer count has nearly doubled year over year to 24 million, with sports playing a significant role in this success.

“Sports continues to be a huge driver, with the NFL, Nascar, golf, Premier League, the World Cup on Telemundo — including the Women’s World Cup going on right now — Big Ten starting this fall, and the Paris Olympics coming up next year,” said NBCUniversal President Mike Cavanagh during an investor call.

NBCUniversal simultaneously airs most of its sports properties, such as Sunday Night Football and Premier League soccer, on both its TV networks and Peacock, following a similar strategy to Paramount’s NFL playbook.

Cavanagh emphasized that simultaneous streaming has given the company and its sports assets “tremendous reach” at a lower cost for consumers.

Peacock’s ad-supported tier is currently priced at $4.99 per month, although reports suggest it may increase by $1 per month in the future. This is considerably lower than the cost of traditional cable TV bundles.

NBCUniversal is also considering bringing the National Basketball Association (NBA) back to its portfolio.

Although Cavanagh stated that NBC doesn’t necessarily need the NBA given its current portfolio, the company is open to exploring upcoming media rights opportunities.

Formal negotiations for NBA rights with companies outside of the current rights holders, Warner Bros. Discovery and Disney, cannot begin until April 2024 unless those partners waive their exclusive negotiation rights.

NBC Sports has previously been reported to be considering a bid for NBA rights.

On the other hand, Disney executives have expressed their belief that ESPN’s live channels will eventually be offered a la carte through streaming services.

Disney CEO Bob Iger recently stated that while the company is open to selling its cable TV channels, ESPN remains an integral part of Disney’s future. Discussions are underway with potential partners or minority investors for ESPN.

ESPN Chairman Jimmy Pitaro debunked the notion that ESPN’s streaming channels would disrupt the traditional TV model, emphasizing the ongoing presence of ESPN on traditional TV and collaboration with pay TV distributors.

Cavanagh mentioned that an ESPN deal is less likely for NBC Sports, and any potential tie-up between the two would face significant challenges due to tax and minority shareholder issues.

Disclosure: NBCUniversal is the parent company of NBC and CNBC.