The Challengers to ESPN’s Throne: Comcast Corporation (CMCSA), News Corp (NWSA)

There’s a battle brewing on the sports landscape, and it’s going to be a big one. In one corner, we have the long standing champion The Walt Disney Company (NYSE:DIS) and their ESPN sports networks. Standing opposite ESPN are two companies that would love a piece of the pie, Comcast Corporation (NASDAQ:CMCSA) and News Corp (NASDAQ:NWSA).

Comcast Corporation (NASDAQ:CMCSA)

Tale of the Tape

The Walt Disney Company (NYSE:DIS) obviously has the upper hand when we look at the sports broadcasting landscape today. ESPN has an estimated 98 million subscribers in the United States alone. ESPN is a part of the Media Networks segment of The Walt Disney Company (NYSE:DIS), a segment that made up 45% of revenues and around 66% of operating income in 2012 (10K PDF).

Comcast recently rebranded their Versus sports channel as the NBC Sports Network. This move happened almost as soon as Comcast Corporation (NASDAQ:CMCSA) and General Electric Company (NYSE:GE) signed the papers to complete the 100% ownership transaction of NBCUniversal to the media group on March 19. Since then the only real results we have from the channel are that of the IndyCar opener, a race that garnered 388,000 viewers for the channel.

While News Corp (NASDAQ:NWSA) may not seem like a company that’s big into sports in the United States, they have a pretty extensive lineup of programming outside the US. In Australia and the UK, the company is a leader in the sports game. The company also recently acquired 49% of the Yankees Entertainment and Sports Network.

Breakdown: News Corp

News Corp (NASDAQ:NWSA) in the United States owns the rights to a variety of sports. The company holds partial rights to the NFL through 2022, a contract with NASCAR for a collection of traces through 2022 and an MLB contract that will see them through 2021.

Outside of the United States News Corp (NASDAQ:NWSA) recently acquired the remaining 50% stake they had yet to buy in Fox Star Asia. They paid around $220 million for the channel that was formerly known as ESPN STAR Sports.

In November of 2012 News Corp (NASDAQ:NWSA) also acquired the remaining share of FOX SPORTS Australia that they did not own.

Combining those international acquisitions with the stateside acquisitions of SportsTime Ohio and the Yankees Entertainment and Sports Network gives you quite a substantial media powerhouse.

Sports are only a minor part at this mega-conglomerate though. There’s also publishing, movies and other media-based interests that continue to bring in the cash year after year. Total revenues for the three months ended Dec 31, 2012 were $9.4 billion. That’s a gain of 5% over the same time in the prior year.

Investment in sports, especially if they decide to build a dedicated sports brand like Sky Sports in the United States, could pay off greatly for News Corp. It will be an uphill battle, though, especially with Comcast jumping into the game.

Breakdown: Comcast

Comcast Corporation (NASDAQ:CMCSA) is providing you your cable boxes, and if all goes to plan they’ll soon be providing you with the sports programming that you watch on them.

As a Formula 1 fan, I found myself turning to channel 220 on my DIRECTV (NASDAQ:DTV) box to catch the latest Grand Prix. It was the new NBC Sports Network channel that Comcast had just rebranded after acquiring 100% of NBC from General Electric Company (NYSE:GE).

The network currently has the rights to the NHL, Indy Car and Formula One. These are some very niche brands in the sporting world, but it is a start. The network also has rights to some games of England’s Premier League, the pinnacle league in the world’s most watched sport. They’re hiring top talent to host the games as well, according to SBNation.

If anyone is going to challenge ESPN over the next few years, it will have to be Comcast Corporation (NASDAQ:CMCSA). They’re already jumping into the deep end right here in an effort to take away some market share, but it will be a challenge.

In order to win this game, Comcast Corporation (NASDAQ:CMCSA) will have to dig deep into their pockets and buy the rights to the sports that Americans watch the most of. The NHL is popular in the Northeast, but the same cannot be said for the South. Rights to MLB, NFL, and the NBA could really help propel this network further forward. The real winner would be a program on par with Sportscenter. If they can do that, with the right talent anchoring, then they could have a winner on their hands.

A Quick Look at ESPN

ESPN is the largest sporting network in the United States, there’s no doubting it. The network also happened to be the biggest division at one of the world’s largest media companies. It therefore makes sense that competitors would want a cut.

To take a cut from this thirty year old giant will be no easy task. They have the recognizable talent, they have the rights to top sporting events, and they have the rights to show all of the replays. They’ve been doing this for three decades without any real challenge; they know what they’re doing.

While Comcast and Fox are trying to set up their operations in the United States, ESPN is busy expanding around the world. Two of their newest and biggest markets are the UK and Asia. The network is already off to a great start in these regions, and the extra cash there will only allow them to buy up more rights.

Investor Takeaway

All three of these companies are strong. They all have a sturdy base outside of sports, and all of them will likely benefit from sports as the years go on.

The NBC Sports Network play is a tricky one to judge as ESPN has never truly had to face any tough competition. I believe that the network will do just fine, but whether it can take on ESPN or not is something that we’ll have to wait and see on.

If you’re an investor, and you’re looking for a cut of the sports game you should opt for Comcast Corporation (NASDAQ:CMCSA) at this stage. They’re going to grow with their channel in a more prominent space on viewers’ guides. If you don’t want to wait around, The Walt Disney Company (NYSE:DIS) and ESPN are easy buys.

The article The Challengers to ESPN’s Throne originally appeared on is written by Ash Anderson .

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