For the new USA Sports and its parent company Versant, the future may lie in the businesses adjacent to its sports TV properties.
At a Sports Business Journal event Tuesday, USA Sports president Matt Hong said that the company is focused on growing the businesses that are adjacent to its sports television properties, specifically mentioning its GolfNow service — which allows users to book time at golf courses around the country — as a model.
“I think where you’ll see us invest more and more are those digital businesses,” Hong said. “So we’ll obviously continue to invest in our current sports programming; we’ll look for more top shelf sports programming. But in terms of where we’re trying to go and where we want our future revenues to come from, it’ll be those digital businesses that are synergistic to our sports programming.”
Hong said that the goal for Versant is to follow the 50-50 revenue split of the company’s golf business, where GolfNow already generates about the same amount of revenue as Golf Channel.
“That’s the model for the rest of Versant: to continue to invest in the core business — which is television, which is linear television and sports programming — but to grow the adjacent businesses so that the mix of revenue is much more like the golf vertical. … We feel like we’ve got a pretty good plan for growing these adjacent businesses, these digital businesses that are adjacent to our current television businesses.”
Hong said that Versant — which consists of cable networks and digital businesses spun off from Comcast — will comprise “about $7 billion in revenue, over $2 billion in EBITDA,” later referring to it as an “excessively well-funded startup.” Hong: “Obviously, it is not a growing business … the challenge and the opportunity for us is to take that free cash flow and figure out where we’re going to reinvest it.”
Those efforts could include M&A opportunities in line with the Golf Channel/GolfNow model. “I think if we look back five years from now and say, what is it that we have hoped to achieve not just as USA Sports but as Versant, it’s what are those businesses that we added to our current core media businesses to make us look more 50-50 from a revenue mix standpoint.”
As for the television business itself, Hong gave no indication that USA Sports is looking to make major changes to its distribution model, which currently consists solely of linear cable and authenticated streaming — saying that the company is “bullish” about the cable model and that it is “very much leaning into the authenticated network experience of USA and Golf Channel.”
Hong: “Whether you come to our sites, whether you go to our distributors’ sites, these are ubiquitous streaming platforms that you can authenticate and use on tens of devices — that’s our streaming strategy for now.”
Versant will complete its spinoff from Comcast in the first week of January, Hong said, but as previously noted will continue to maintain a commercial relationship with NBCUniversal for two years. That includes the use of NBC Sports’ Stamford, Conn., studios for USA Sports programming — including a new WNBA studio show that Hong said will be announced in the coming weeks — and continued sharing of rights from NASCAR to the Olympics.
