NBC Sports activities Community will stop operations in 2021

Ivan Provorov # 9 of the Philadelphia Flyers plays the puck against Brad Marchand # 63 of the Boston Bruins during the first period in a round robin game during the 2020 NHL Stanley Cup Playoffs at Scotiabank Arena on August 2, 2020 in Toronto, Ontario.

Mark Blinch | National Hockey League | Getty Images

The NBC Sports Network will be closed.

The network will cease operations through the end of 2021, a person familiar with the CNBC’s familiar plan. NBC will transfer its sports media rights, including the National Hockey League, to USA Network. The person spoke to CNBC on condition of anonymity as the person is not allowed to comment publicly on the matter. Both networks are owned by CNBC’s parent company NBCUniversal.

The plan to cease operations will allow NBC to gain more coverage for its sports content. The USA network is available in 86 million households, while NBCSN has an estimated reach of 80 million households.

NBCUniversal initially hoped that NBC Sports Network would be its answer to Disney’s ESPN – a cable sports network that could justify high fees from pay-TV retailers for its popular sports content. Twenty-first Century Fox developed Fox Sports 1 and CBS introduced CBS Sports Network for similar reasons.

But none of the cable sports networks has ever seriously threatened ESPN, and the media industry’s move to streaming video has made linear sports networks anachronistic. NBCUniversal is considering shutting down multiple networks, CNBC reported in October, in an attempt to consolidate its best assets into fewer networks. By shutting down poorly performing cable networks, older media companies could keep the shrinking bundle of cables afloat while maintaining subscription income by increasing the fees for the existing networks.

The network began as the Outdoor Life Network in the 1990s and was renamed Versus in 2006. Comcast owned the network when it acquired NBCUniversal in 2011, at which time it was renamed NBC Sports Network.

NHL playoff games, a selection of NASCAR races and Premier League content will be broadcast to USA Network upon completion of NBCSN.

The Stamford, Connecticut-based network acquired the NHL rights in 2011 with a 10-year package worth $ 2 billion. The agreement runs for the current 2020-21 season.

NBCSN also has a $ 4.4 billion rights package with NASCAR that expires in 2024 and has the prospect of its extension option with rights to the European Football Premier League (valued at around $ 1 billion). The network moved some of those games to NBC’s streaming service, Peacock, last year.

Back to the Future

Longtime sports media rights advisor Lee Berke said the move was “back to the future” for the USA Network, which broadcasts sports content. The channel was originally a national distribution arm for the Madison Square Garden Sports Network and broadcast sports content including the National Basketball Association until 1984.

“The fact that the sport is returning to the US is not a new concept,” Berke said in an interview with CNBC on Friday. “Certainly the distribution helps, but this move reflects some things – the pay-TV package is shrinking. The subscriber base is shrinking. So it justifies having fewer networks on air and the other part of that is the growth of streaming.”

Berke, the CEO of LHB Sports, a sports consultancy, said streaming trends are forcing the network to reinvent itself “when consumer viewing behavior changes. This has been a migration of sport from broadcast to cable in the past 20 years , 30 years ago, when pay-TV got bigger and bigger, and now you’re seeing sports that are moving to streaming.

“I think it’s a sensible move given current trends,” said Berke of NBCSN’s closure. “They try to always be one step ahead of the wave. They don’t want to stand behind it and miss it. But that makes sense, given where the pay-TV is going and where the streaming is going.”

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

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