Why would NBC launch a new NBC Sports Network?

As part of the new long-term distribution agreement that NBC struck with YouTube TV on Thursday, the network announced it would proceed with its plans to launch a new cable channel called NBC Sports Network. Yes, NBC is seemingly relaunching a channel it shuttered just four years ago, or at least relaunching it in name only.

It might seem like an odd decision in 2025. Cable is dying, and viewers are flocking to streaming at an accelerated rate. Why would it make sense for NBC to launch a new network now?

Well, it’s not as crazy as it seems. NBC, perhaps more than any of its peers, has invested heavily in live sports to fuel the growth of its streaming service, Peacock. Between exclusive Big Ten football and basketball games, the English Premier League, an NBA deal that begins later this month, the Olympics, an MLB deal reportedly set to start next year, and more, Peacock has become a key destination for sports fans.

But even with all of that inventory, the streamer still hasn’t crossed the threshold into “must-have” status for all sports fans.

The Big Ten games are typically of lower quality, thus making them justifiable to skip even for ardent fans. NBA fans will be able to catch games on NBC, ABC, ESPN, and Prime Video on nearly every day of the week, except Monday, making Peacock’s inventory an easy sacrifice, even for hardcore basketball viewers. The Olympics only require a one-month subscription. Baseball fans won’t necessarily be dying to watch whichever game is on Peacock, similar to the current MLB packages on Apple TV+ and Roku. And Premier League fans have likely already had Peacock for some time, creating little potential for subscriber growth for that property.

All of that is a long way of saying that NBC has invested billions of dollars into live sports rights as a means of driving Peacock subscriptions, and gambling on regular-season basketball and baseball to recoup that money is a perilous proposition.

Enter: NBC Sports Network.

According to previous reports, the network will be designed to carry some of Peacock’s exclusive live sports programming and distribute it to audiences that are still subscribed to the bundle. Latest estimates suggest 65 million households are still pay TV subscribers. One would have to imagine that if a person is already paying for a full cable or satellite bundle, which includes a plethora of the most important live sports, they’d be less likely to shell out an additional $11 per month (with the recent price hike) for Peacock.

NBC wants a way to capitalize on these 65 million households with its valuable live sports programming, albeit likely not valuable enough for some people to shell out additional money for it a la carte. Initially, reports suggested that NBC was planning to release its new NBC Sports Network into genre-specific bundles, such as DirecTV MySports or Xfinity Sports & News. However, Thursday’s announcement indicated the network would be included within YouTube TV, which is not genre-specific. Perhaps this opens the door for the network to be included in other standard-issue packages, greatly increasing its potential reach.

If so, NBC can start collecting per-subscriber fees from a significant portion of those 65 million pay TV households. Let’s conservatively estimate that NBC can ask for $0.25 per subscriber per month on its new channel. Assuming 65 million subscribers, that would come out to about $200 million per year, approximately the price NBC will reportedly pay for its new MLB package. That’s before NBC even sells a single commercial.

NBC needs to pay for these expensive live sports rights somehow, and tapping into what’s left of the cable bundle is a wise way to do so. Let’s also consider that most people remaining in the bundle are there because of live sports. Adding a channel dedicated to live sports programming will only help keep those still inside the bundle in place.

It’s also important to consider what is happening to the rest of NBC’s cable assets at the end of the year. All of its current cable portfolio, aside from Bravo, is being spun off into Versant. That means all the per-subscriber fees that NBC currently collects from USA Network, Golf Channel, MSNBC, CNBC, SyFy, and others are going away. Launching NBC Sports Network will help supplement some of the cash flow the company will lose when it spins off.

Is it unusual to see NBC launch a cable channel in 2025? Yes. Even more so because it’s going by the same name of a network it shuttered just four years prior. But, make no mistake, NBC is doing this because it will help leverage its wide-ranging live sports portfolio more effectively than it could with Peacock alone.

¡Vive la NBC Sports Network!