In a deal that raises its sports profile in the mid-Atlantic region, Comcast Corp. last week bought majority stakes in Washington, D.C.-based Home Team Sports and Minneapolis-based Midwest Sports Channel from Viacom Inc.
The deal value was estimated by some at $150 million, including cash and agreements for future carriage by Comcast of Viacom-owned basic and digital services. Comcast now owns three regional sports networks, including its own Philadelphia-based Comcast SportsNet.
The move also gives the MSO greater branding and strategic marketing opportunities among its various sports holdings and cable systems within the mid-Atlantic territory, Comcast executives said.
The agreement is one of several Comcast made to dominate the mid-Atlantic sports marketplace. Earlier this year, the MSO paid $20 million for naming rights to the University of Maryland's new basketball arena. Comcast also bought three area minor-league baseball teams affiliated with Major League Baseball's Baltimore Orioles.
With a heavy cable presence in the Baltimore-Washington area, Comcast wants to develop a number of strategic marketing and promotional synergies between cable and sports properties, although executives would not reveal specific details.
"We are delighted to be the new owner and operator of HTS and MSC," Comcast president Brian Roberts said in a prepared statement. "We are firm believers in the branding and marketing opportunities sports programming provides us with in key markets."
Sources close to the situation said Comcast-which has few systems in the Minnesota or Wisconsin area-may sell MSC to Fox Sports Net, which it outbid for the two services. FSN owns 33 percent of HTS, and has affiliation agreements with both networks.
FSN-which obtained cable rights to the National Hockey League expansion Minnesota Wild franchise-has already announced plans to launch a competing regional sports network in Minnesota in September.
Comcast representatives would not comment on the matter.
For Viacom, the deal completes plans to divest sports properties acquired along with CBS Corp. The CBS Cable operations, including the regional sports networks, were combined with Viacom's MTV Networks.
MTVN president and chief operating officer Mark Rosenthal said in a prepared statement that the properties were "highly valued," but outside of MTVN's scope.
Sources close to the situation said Comcast also agreed to increase distribution of several Viacom and digital services, including MTV: Music Television digital offshoot MTV2. MTVN would not confirm nor deny any such arrangement.
Representatives from both HTS, which serves 4.7 million subscribers, and MSC, which has 2.5 million, don't expect any major changes in current business operations.
HTS holds television contracts with several area professional and college teams such as the Orioles, the National Basketball Association's Washington Wizards and the NHL's Carolina Hurricanes, while MSC and its sister service, MSC Wisconsin, have cable rights to MLB's Minnesota Twins and Milwaukee Brewers and the NBA's Minnesota Timberwolves and Milwaukee Bucks.
"It's a positive move for us, and it aligns us with an entity that's a strategic fit for us, " MSC vice president and general manager Steve Woelfel said.
"Comcast has such a strong local emphasis on [Comcast SportsNet], but we have a lot of strong programming, as well, so I don't expect many changes," HTS vice president of marketing, affiliate relations and programming Terry Chili said.
Roberts also said Comcast would continue to distribute HTS and MSC to current affiliates, which include direct-broadcast satellite providers DirecTV Inc and EchoStar Communications Corp.
Comcast does not offer Comcast Sports Net service to DBS, delivering the signal via fiber to avoid program-access rules.
"We are encouraged by Comcast's announcement that it plans to continue offering these satellite-delivered sports programming networks through all existing affiliates," Satellite Broadcasting and Communications Association president Chuck Hewitt said in a statement.