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Ivan Provorov # 9 of the Philadelphia Flyers plays the puck against Brad Marchand # 63 of the Boston Bruins in the first period of a round robin game of the 2020 NHL Stanley Cup Playoffs at Scotiabank Arena on 02 August 2020 in Toronto, Ontario.
Mark Blinch | National Hockey League | Getty Images
The NBC Sports Network is being closed.
The network will cease operations by the end of 2021, a person familiar with the plan confirmed to CNBC. NBC will transfer its rights to sports media, including the National Hockey League, to USA Network. The person spoke to CNBC on condition of anonymity as they are not authorized to comment publicly on the matter. Both networks are owned by CNBC parent company NBCUniversal.
The plan to stop operations will allow NBC to attract more reach for its sports content. USA Network is available in 86 million homes, while NBCSN has an estimated reach of 80 million homes.
NBCUniversal initially hoped that NBC Sports Network would be its answer to Disney’s ESPN – a cable sports network that could justify high affiliate fees from pay-TV distributors because of its popular sports content. The twenty-first Century Fox developed Fox Sports 1, and CBS introduced CBS Sports Network for similar reasons.
But none of the cable sports networks have ever seriously threatened ESPN, and the media industry’s shift to streaming video has made linear sports networks anachronistic. NBCUniversal plans to shut down multiple networks, CNBC reported in October, to consolidate its best assets into fewer networks. Shutting down underperforming cable networks could allow legacy media companies to keep shrinking wire harness afloat while sustaining subscription revenues by increasing costs on their existing networks.
The network began in the 1990s as the Outdoor Life Network, then was renamed Versus in 2006. Comcast owned the network when it took over NBCUniversal in 2011 and renamed it NBC Sports Network at the time. .
NHL playoff games, selected NASCAR races and Premier League content will move to USA Network after NBCSN closes.
The Stamford, Connecticut-based network took over the rights to the NHL with a 10-year, $ 2 billion package in 2011. The deal spans the current 2020-2021 season.
NBCSN also has a $ 4.4 billion rights package with NASCAR which expires in 2024 and offers its option to renew with the rights to the European Premier League of Football (worth approximately $ 1 billion. dollars). The network transferred some of these games to NBC’s streaming service Peacock last year.
Back to the future
Long-time sports media rights adviser Lee Berke said the move was “back to the future” for USA Network which broadcasts sports content. The channel was originally a national distribution arm for Madison Square Garden Sports Network, broadcasting sports content, including the National Basketball Association, until 1984.
“The return of the sport to the United States is not a new concept,” Berke told CNBC on Friday in an interview. “Certainly, distribution is useful, but this decision reflects a number of things: the pay-TV bundle is decreasing. The number of subscribers is decreasing. So that justifies that fewer networks are on the air and the another part is the growth of streaming. “
Berke, CEO of LHB Sports, a sports consultancy firm, said streaming trends are forcing the network to reinvent itself “as consumers’ viewing behavior changes. There has been a migration of sports from broadcasting. to cable over the last 20, 30 years when pay TV got bigger and bigger, and now you see sports migrating to streaming.
“I think it’s a sensible move given the trends that are happening,” Berke said of the NBCSN shutdown. “You’re trying to stay ahead of the wave. You don’t want to be behind and miss out. But it makes sense depending on where pay TV is going and where streaming is going.”
Disclosure: Comcast owns NBCUniversal, which is the parent company of CNBC.
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