Versant Eyes Broader Sports Offerings as Competitors Shift Focus to NFL – Insights from CEO Mark Lazarus
As major media corporations navigate a competitive contract cycle with the NFL, Versant is poised to seize opportunities for rights to additional sports leagues, according to CEO Mark Lazarus. Speaking during a recent earnings call, Lazarus emphasized the potential impact on companies maintaining or increasing their NFL expenditures, suggesting that they may have to make more selective content decisions.
“I do believe that that will put pressure on those companies that retain or grow their NFL expense to make decisions on other content, and that we will selectively look at contracts,” he stated. Lazarus noted the upcoming availability of rights for various leagues, mentioning baseball, hockey, soccer, and the Premier League as potential targets.
Lazarus underscored Versant’s strategic positioning since its spin-off, highlighting recent contract extensions with the United States Golf Association and the PGA of America for the Ryder Cup, along with a stronger commitment to women’s sports through expanded partnerships with the WNBA and the completion of the first season of League One women’s volleyball. “What I would just express is that we are well positioned,” he remarked.
The first season of League One volleyball on USA Network achieved significant viewer engagement, while Versant’s inaugural WNBA season recently launched, signaling the company’s growing momentum in sports broadcasting.
The company’s financial performance in the first quarter, following its separation from Comcast/NBCUniversal, exceeded investor expectations. Although both revenue and earnings experienced a decrease, the declines were less than anticipated, with shares rising as much as 11% following the report, ultimately settling at a 3% increase, reaching $41.69.
Versant reported revenue of $1.7 billion, down 1% due to declining linear distribution and advertising sales, countered partially by contractual rate increases and growth in platforms like Fandango and Golf Now. Notably, content licensing revenue surged by over 100% to $121 million, buoyed by a lucrative multi-year agreement regarding Keeping Up With The Kardashians.
Lazarus characterized the first three months of the year as a significant milestone, providing a strong launch to 2023. Programming highlights included coverage of the Milan Cortina Olympics on USA Network and CNBC, red carpet events on E!, and a notable increase in viewership for Golf Channel during the PGA Tour.
The company’s Platforms division, which includes services like Fandango and Rotten Tomatoes,recorded a 9.5% growth, reaching $192 million in revenue. The golf segment, particularly GolfNow, demonstrated positive momentum, supported by a partnership with Rory McIlroy, and Lazarus emphasized its role in integrating content with consumer engagement.
As for upcoming initiatives, the new MS Now service is in the works, intended as a subscription-based direct-to-consumer offering centered around the channel’s content. Details regarding pricing are yet to be determined. Additionally, a free advertising-supported video-on-demand (AVOD) service from Fandango is also on the horizon.
Despite a 22% drop in total net income to $286 million—partly attributed to increased public company costs following its separation from Comcast—Versant reported an adjusted EBITDA rise of 5% to $704 million, alongside a strong free cash flow of $558 million.
The company declared a quarterly cash dividend of 37 cents per share and announced an accelerated share repurchase program valued at $100 million, reflecting its commitment to returning capital to shareholders.
