USA Sports president outlines Versant’s business strategy

It’s going to be an uphill battle for spinoff companies like Versant, left only with the assets from their former parent company that are in secular decline.

For Versant, those assets primarily consist of NBC’s cable network portfolio. Of those networks, USA Network and Golf Channel will prove to be two of the most valuable. And that’s because each network has an extensive portfolio of live sports rights. Together, the networks form most of what will soon be known as USA Sports, Versant’s sports division.

While NBC is casting the networks aside because of their downward trajectory, they remain impressively valuable assets. At a Sports Business Journal event on Tuesday, USA Sports president Matt Hong revealed that Versant’s assets generate approximately $7 billion in annual revenue and over $2 billion in EBITDA.

However, that revenue isn’t generated purely from its cable channels. As part of the spinoff, Versant was also granted some of the digital businesses associated with its brands. Perhaps the most successful example of those businesses is GolfNow, the tee-time booking software that has become very lucrative alongside Golf Channel. Hong says that of the revenue generated by Versant’s golf vertical, GolfNow accounts for half, with Golf Channel’s distribution and advertising revenue accounting for the other half.

It is those types of opportunities that Hong believes can turn Versant’s trajectory around.

“That’s the model for the rest of Versant: to continue to invest in the core business — which is television, which is linear television and sports programming — but to grow the adjacent businesses so that the mix of revenue is much more like the golf vertical,” Hong said, per Sports Media Watch. “…We feel like we’ve got a pretty good plan for growing these adjacent businesses, these digital businesses that are adjacent to our current television businesses.”

There are certainly opportunities to be had. For instance, one could envision CNBC as a prime brand to capitalize on. The network attracts an affluent audience, similar to Golf Channel, and CNBC is a trusted source for news about markets and investments.

But the company’s ambitions for its ancillary businesses are pretty lofty. Hong says Versant would ideally have a 50-50 revenue split between its linear television business and its other forward-looking investments.

“I think if we look back five years from now and say, what is it that we have hoped to achieve not just as USA Sports but as Versant, it’s what are those businesses that we added to our current core media businesses to make us look more 50-50 from a revenue mix standpoint,” he said.

No doubt, Versant will have plenty of free cash flow to make investments. But as cord-cutting continues, Versant will need its non-television investments to pay off to see long-term success.