Versant Media Group has a long way to go, but its Q3 report highlighted some encouraging signs for the Comcast spinoff that has started – slowly but surely —
carving out a strategic niche for itself amid a fast-evolving video ecosystem. First of all, its cable networks remain profitable, especially in news and sports, even as cord cutting continued to chip away at revenue in Q3: total revenue fell 4% year-over-
year to $1.6 billion as linear distribution revenue dropped 6% to $935 million — and contractual rate increases only partially offset sub losses. Advertising revenue also declined, falling 5% to $373 million, but much of that stemmed from a comparison with the prior-year quarter that included the Ryder Cup. Adjusted EBITDA fell 7% to $353 million. “While our pay TV business isn’t a growth engine, it will remain resilient and highly profitable for a very long time,” CEO Mark Lazarus told investors during the Q3 earnings call this week. On the plus side, Versant finished four major carriage agreements in the quarter that covers 75% of its cable net subs through 2028, welcome breathing room for a company anxious to branch out beyond traditional cable despite its cash-engine attributes. Versant appears open to new models, seeming to shy away from the crowded premium streaming market. “We’re not creating streamers,” Lazarus said. “We’re creating direct-to-consumer interactive products.” That may seem like semantics (and perhaps it is), but it’s clear that Versant sees more a community than a sub base, with MS Now’s $7.99/mo “membership” including talent access and live experiences; a comparable CNBC product is on deck for early 2027 (apparently separate from its existing CNBC Investing Club product spearheaded by Jim Cramer and getting a new premium tier next year as well). Then there’s Fandango’s free, ad-supported streaming app that launched in July, carries most of the roughly 300 annual Bundesliga matches Versant recently acquired, and helped boost platform revenue by 10% YOY to $245 million. In addition, Versant’s branded FAST channels around brands CNBC, E!, and Oxygen are already available on Prime Video and The Roku Channel (Fox, by the way, just closed its Roku acquisition this week.) All told, the ecosystem helps position Fandango as a digital centerpiece.
Next? Versant remains an intriguing company that’s starting to shed any perception that it’s a dumping ground for declining cable assets that still throw off a lot of cash. Lazarus and his minions aren’t talking like people managing a declining asset; they sound like boosters for a new digital play across multiple platforms that can use all that free cash flow to finance the next generation of apps and consumer delivery formats. Meanwhile, any struggling cable nets hoping that Versant might scoop them up may want to curb their enthusiasm. “We’re not looking for horizontal scale,” said Lazarus, adding that buying up more cable nets might “prolong our life, but it doesn’t make our life much better.” Versant appears to be building a community and membership model around decades-old brands that remain among the best and most recognized in the business. That’s not insignificant. While Versant has plenty of challenges as core revenue declines, execs seem to be planning years in advance for the next big thing. “This is a multi-year journey,” Lazarus said. “We’re going to have to be patient. We’re confident, but it’s really early.” Time will tell whether investors share the patience of Versant’s top brass.
