Welcome back to another extended edition of the Hot Mic Newsletter, GOLF’s weekly send covering all things golf media from me, James Colgan. The topic of this week’s newsletter is a surprising earnings call announcement from NBC/Golf Channel owner Comcast. As always, if you’d like to be the first to receive exclusive insights like these directly from me, click the link here to subscribe to our free newsletter send. But first, we work the phone lines back to Comcast’s latest earnings call.

BIG COMCAST NEWS

In an earnings call Thursday, Comcast president Mike Cavanagh released a shocking bit of news: The telecom giant is considering spinning off its cable networks into a new, publicly traded company. (NBC, an over-the-air broadcast network rather than cable, would not be part of the spinoff.)

The decision comes from a few concurrent developments for earnings-obsessed Comcast, whose media empire includes the entire NBCUniversal suite and several associated cable networks, including Golf Channel. The first development is that Comcast’s long-term media growth exists on streaming, not cable television. The second development is that Comcast hopes to invest further into Peacock, perhaps even by partnering with another streamer (hello, Paramount!) to solidify its streaming position, and such a deal would be expensive. And the third development is the cable TV business, which is at best in a period of steep decline, and at worst in the early-to-middle stages of a death spiral.

(Without getting too deep into the cable-TV dilemma: streaming has caused many consumers to cord-cut, which has caused smaller cable TV audiences, which has resulted in fewer advertising dollars on cable TV and, crucially, smaller “carriage fees” from providers to networks — all of which has caused cable network revenues to plummet and the cable TV industry at large to begin a slow collapse unto itself.)

Considering all of this — and Comcast CEO Brain Roberts‘ heavy emphasis on cash-positive businesses — Comcast appears to be distancing its media business from cable networks. A spinoff company would allow Comcast to offload its cable networks, mitigating the risk of a low-upside business on Comcast’s larger business portfolio and positioning Comcast to raise capital by selling equity in the new company to outside investors.

While Golf Channel wasn’t named explicitly as part of a potential spinoff, it is 1) a cable network and 2) owned by Comcast. But the suggestion of a spinoff raises its own set of questions for Comcast and Golf Channel, like…

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IS GOLF CHANNEL WORTH SPINNING OFF?

If Comcast’s decision is being driven by the collapse of the cable TV market, then it surely also understands the value of live sports programming, which is the last bastion of moneymaking business in cable TV. Even today, cable networks like ESPN and TNT have kept their businesses afloat thanks to the generous audiences earned by their live sports properties. (Another quick aside: larger, more stable audiences equal better advertiser dollars and larger carriage fees from providers, which equals a healthier business.)

Considering Comcast’s obsession with cash-positive businesses, and Golf Channel’s positioning as a cable network with regular live sports, is it wise to spin off Golf Channel and the many hours of live golf programming it generates per year? I suspect the answer lies somewhere deep in an Excel spreadsheet.

WHAT HAPPENS TO THE PGA TOUR DEAL?

We can say safely that NBC/Comcast is still on the hook for the $400ish million per year it has pledged to the PGA Tour through the end of the decade, even in the event of a spinoff. This is because a good chunk of the value of the PGA Tour/NBC agreement is tied to NBC’s weekend national broadcast windows, while a much smaller chunk is tied to Golf Channel’s remaining hours of Tour coverage. It’s hard to see that agreement changing measurably under new (or adjusted) Golf Channel ownership.

WHAT HAPPENS TO THE SPINOFF COMPANY AFTER IT’S CREATED?

Right now nobody knows, because the spinoff doesn’t even exist. But Cavanagh indicated Comcast intends for the new company to be “well-capitalized” — which indicates Comcast would likely consider outside investors in exchange for equity.

Could the spin-off eventually lead to a sell-off of NBC’s cable network assets, including Golf Channel? Would Comcast accept a godfather offer for the entire spin-off company? These options could fundamentally shift Golf Channel’s long-term outlook.

COULD THE PGA TOUR RESCUE THE GOLF CHANNEL?

This is purely speculative, and a long way off, but we’ve heard whispers about the PGA Tour absorbing an equity stake in Golf Channel, if not total control, for years.

On one hand, it makes sense for the Tour to keep the sport’s cable network alive, particularly considering how many hours of programming Golf Channel absorbs each year, and the value of studio shows like Live From to the greater pro golf product. On the other, there’s a business reason why NBC is considering off-loading its cable networks in the first place.

One (silly) argument in favor: The Tour wouldn’t have to change much of the branding. In 2022, Golf Channel’s logo was recommissioned to include an homage to the PGA Tour logo.