Comcast Corporation reported its second quarter earnings on Tuesday, revealing that the company did not reach year-over-year estimates pertaining to its film studio and theme parks. Revenue for the quarter finished at approximately $29.69 billion, which is down 2.7% from the second quarter last year. Although the company’s adjusted EBITDA declined by 0.7% year-over-year to $10.17 billion, its free cash flow diminished by 60.9% to $1.338 billion. The company was able to grow its adjusted earnings per share to $1.21, a 7% year-over-year increase, while also realizing a 38% boon in paid subscribers for its Peacock streaming service concurrent with $1 billion in revenue.
The company has been reported to have finalized a media rights deal with the NBA, adding to its portfolio of live sports broadcasting rights. NBC has not broadcast NBA games since it lost rights to the league in 2002, but it looks to be making a return with a media rights package that is reportedly worth $2.5 billion per year. During the company’s quarterly earnings call, Comcast president Mike Cavanagh divulged that the media conglomerate has reached an 11-year deal with the NBA and that it does not expect to be impacted by Warner Bros. Discovery exercising the matching rights provision in its existing contract.
“This package, which begins with the 2025-26 season includes 100 NBA games each regular season across NBC and Peacock, which is more than any other media partner and more regular season games than each existing partner has under the current rights deal,” Cavanagh said. “For playoffs, we will have first and second round games each year exclusively on our national platforms, and six NBA conference final series over the course of the term of the deal, which is more playoff games on average each year than any other media partner.”
Cavanagh outlined that Peacock will exclusively carry 50 national regular season and postseason games, which will include national Monday night games and doubleheaders. The deal will also include rights to the NBA All-Star Game and All-Star Saturday Night each year, along with doubleheaders at the opening of the season and on Martin Luther King Jr. Day.
The package also includes the WNBA where Peacock, NBC and USA Network will televise more than 50 WNBA regular season and first round playoff games, along with seven WNBA conference semifinals and three WNBA Finals series. Comcast has also acquired the rights for USA men’s and women’s basketball games ahead of the Olympics and FIBA World Cup. Xfinity will serve as the marketing partner in the video category for both the NBA and WNBA as well.
Within his synthesis of the deal, Cavanagh explained that the company is excited to partner with the league for a variety of reasons, one of which is the “broad, diverse and youthful audience” that it brings. Viewership for these games further expands NBCUniversal’s reach across both broadcast and streaming platforms, facilitating the company to create new entertainment content and opportunities for both companion programming and marketing collaborations pertaining to the “pop culture appeal” of the NBA.
“The nine-month basketball season completes our year-round calendar for sports, which already includes the NFL, Olympics, Premier League, NASCAR, PGA Tour, Big Ten and World Cup,” Cavanagh elucidated, “and our NBA package will establish much-watched Sunday, Monday and Tuesday night traditions on NBC and Peacock.”
The media rights deal with the NBA will also assist in growing advertising sales in selling NBA advertising inventory packages with other programming on its networks. Furthermore, NBCUniversal will be able to add and monetize subscribers on both linear television and Peacock while also optimizing the programming investment made by the Comcast subsidiary across several genres.
“The NBA’s decision to partner with us is a testament to our breadth and reach, our operational excellence in sports and innovation, and our decades of experience delivering world-class content to consumers,” Cavanagh said. “Much like our long-standing relationships with the NFL and the Olympics, we look forward to putting the weight of our entire company behind our partnership with the NBA for decades to come.”
Peacock has had success in driving subscribers for exclusive sports broadcasts in the past, evidenced by the record-setting streaming viewership for the 2023 AFC Wild Card Game between the Kansas City Chiefs and Miami Dolphins. Moreover, Peacock minimized churn after the game, retaining 71% of users whose sign-ups were attributed to the AFC Wild Card Game, according to a study by Antenna. Cavanagh expressed later in the call that he wished the contract would start sooner and affirmed that the company would begin to bear the expense in the fall of 2025.
“Opportunities like this come along very rarely when there’s long-term relationships up for grabs,” said Brian Roberts, chairman and chief executive officer of Comcast Corporation. “Inside and we’ll have – when it all gets announced, the detail that Mike described – we have probably more content than anybody and it’s all, I think, at a value that we’ll be able to, as one of the other questions asked, support and demonstrate.”
Roberts articulated that combining its existing assets, such as NBC, and the growing Peacock OTT streaming platform creates an appealing value proposition that will help the company maximize reach and access. Drawing a comparison to the forthcoming broadcast of the Olympic Games Paris 2024, there will be content on NBC but more to consume on Peacock, a strategy pursuant to trends in viewership.
“It’s a very exciting moment,” Roberts explained, “and I think we’ll have more to say in the weeks ahead.”
