Brian Roberts, Comcast chairman and chief executive, said the US cable industry giant is talking with various American pro sports leagues about possible rights fee relief that could ideally be passed on to consumers in the form of reduced monthly charges for sports television channels.
Comcast, as the parent company of NBC Sports, has exposure to the growing sports television fee issue on two key fronts. NBC Sports pays a variety of pro sports entities, including the National Football League and National Hockey League, billions of dollars each year in rights fees for live game rights.
But as one of the country’s largest cable television distributors, Comcast also is passing along charges to consumers for national and regional sports TV networks that currently have little to no live programming to offer due to the ongoing Covid-19 pandemic. The monthly charges from the sports networks to the distributors have not been meaningfully altered amid the public health crisis.
“Our focus at the moment is trying to work with each of the various leagues where I think ultimately the answers to some of these questions reside,” Roberts said in a quarterly earnings call with analysts. “The [sports] leagues have to decide are they going to be playing, what happens to the future, if they’re just starting the season, or the current one that has been disrupted….It’s very much top of mind. If we are able to get clarification, then we can give that to our customers.”
Roberts’ comments come a day after New York state attorney general Letitia James wrote Comcast and six other major US cable and satellite TV companies looking for fee reductions due to the pandemic and lack of live sports.
“It is simply inappropriate for New Yorkers to be burdened by high costs for services that the cable providers are not able to deliver, and programming that is a mere vestige of what has been expected,” James wrote. “Reducing those burdens is not only legally and practically appropriate, it is clearly the right thing to do.”
Many of the major US pro sports leagues are on hiatus due to Covid-19, with no firm timetables for return. Some properties such as the PGA Tour and Nascar are planning to resume competition in the coming weeks, but without attending fans.
Roberts acknowledged the situation around the sports television fees and overall rights landscape “works differently in Europe than it does in the US,” and indeed Comcast’s UK distribution arm, satellite TV service Sky, has already allowed for the pausing of charges on unbundled sports subscriptions for its subscribers.
“The level of cancellations we’ve had in sports is de minimis,” said Jeremy Darroch, Sky group chief executive. “So we think that positions us well to bring customers back when the sports season resumes. In terms of negotiations with sports rights holders, we are talking to pretty much everybody at the moment.
“In terms of the future on sports renegotiations and new contracts, the principle is that our approach doesn’t need to change because we start with value, and the value that we see, and we bid against the value in a disciplined way. One of the advantages I think about the way sports are sold in Europe is that, typically, we’re on shorter cycles. The average cycle will be three, perhaps four years,” Darroch said.
Comcast, meanwhile, said it is not expecting financial losses due to the rescheduling of the Tokyo Summer Olympics to 2021, even as the event was due to be one of the most watched events across all of US television all year. The company also had previously sold an Olympics record $1.25bn in US advertising for the Games.
“Somewhat offsetting the advertising declines in the second quarter will be the lower sports rights amortization given we amortize those rights during the period in which games air,” said Mike Cavanagh, Comcast, senior executive vice president and chief financial officer.
NBC Sports, however, also airs the top show in all of US primetime TV with the National Football League’s Sunday Night Football. It is not known what the NFL’s scheduling plans are for the upcoming season amid the pandemic. But Roberts said he is encouraged by initial moves to resume play among some sports, particularly in Europe.
“We absolutely believe that sports will come back, and when they do, there’s bound to be so much excitement and enthusiasm, which may resonate even more than before, regardless as to whether or not stadiums are filled with fans,” Roberts said. “I have reasons to be optimistic as many European teams are already back practicing, and we have hoped that they resume play as early as May. Perhaps this will be the playbook the rest of the world uses and allows us to have conversations with our partners as we constructively work together to find solutions bring sports back.”
Despite huge hits to segments of Comcast’s business such as theme parks and movies from the pandemic, the overall company financials for the first quarter showed a somewhat more mixed picture. Comcast reported revenue of $26.6bn for the quarter, down just 0.9 per cent from the same period a year ago, far better than many other companies. Net income, however, dropped 40 per cent to $2.1bn.