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NBCU Will Seek Bigger Sports Play

CEO Steve Burke wants to use Versus to challenge ESPN in cable
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NBCU CEO Steve Burke wants to make his company a bigger player in sports programming—and he’s hoping that sports network could become a rival to Walt Disney’s ESPN. NBCU currently has rights to the NHL, NFL Sunday Night Football, and the 2012 Olympics, but Versus is a lightweight in the sports field. Now, the Wall Street Journal is reporting that Burke is trying to gain rights to college sports and negotiate new contracts with the NHL and the Olympics that would allow NBCU to split programming between broadcast and cable TV.

The first deal that Burke plans to go after is for rights to the Pac-12 college sports conference, which includes football, basketball, and other sports from Western schools. The Pac-12 is looking for a 10-year deal worth $220 million a year, plus a commitment from their buyer to launch a regional sports network, which would likely cost about $100 million. Most of which would come from the media partner, the WSJ says, but NBCU hopes to put the college games on Versus and collect carriage fees as a Pac-12 network. They’ll have to bid against several other providers for the deal, including Fox, Turner, and ESPN.

The Olympics might be the crown jewel of NBCU’s sports holdings, but NBCU lost $223 million on last year’s Vancouver games and could suffer another loss with London next summer. Now, according to insiders, NBCU wants a deal to acquire the Olympics from 2016 through 2020—instead of just 2016 and 2018—to give them time to negotiate higher fees with pay-TV companies (and to keep other networks from winning fee increases that Comcast’s cable branch would have to shell out). NBCU would also put Olympic programming on Versus and the Golf Channels to increase fees.

Versus has a long way to go before it can seriously compete with ESPN. The channel isn’t fully distributed, reaching 79.8 million homes while ESPN and ESPN 2 are at 100 million, and Versus’ monthly fees run at $28 cents, whereas the ESPN lineup costs about $5. But if Burke can make the right deals, the addition of Olympic and Pac-10 games to the Versus lineup could turn the channel into a profitable sports destination.