ESPN sells majority stake in X Games to private equity firm
It’s no secret that the Olympics are, in many ways, the last chance for brands to invest heavily in the lucrative multiyear contracts they typically pay for. In fact, many have decided to take advantage of the Olympic Games as revenue-generators, and the Olympics are now a business for them to sell as the host country begins a national campaign to win over the international sports community. The games were introduced as a way to showcase the nation’s wealth, but its marketing efforts have often been overlooked—until now.
According to a report by the Financial Times, NBC Universal, the parent company of the NBC Olympics-winning games broadcast network (NBC) and the NBC Sports Network will soon get majority ownership of the X Games, becoming the first major sports property to do so.
The New York Post also reported that the deal, which will be valued at $225 million, will take just over two months to complete. It is important to note that Comcast (NASDAQ: CMCSA) already owns an ownership stake in the X Games since it purchased the remaining 42 percent of the event from the previous owner, Comcast Broadband, in December 2011. However, it is now selling its stake, giving Comcast (NASDAQ: CMCSA) the ownership of the event in the midst of it’s current transition to a new broadcast network provider.
The idea seems to make sense for NBC, which is expected to receive a share of the $225 million sale. The deal is still in the early stages, so it is unclear exactly how much NBC has to do with the X Games in the future. However, it appears that NBC will be using the $225 million investment to buy in NBC, leaving the X Games with just Comcast (NASDAQ: CMCSA) and X Games (TNT Games Inc.) in the short-term.
The idea is especially important for NBC, as the Olympics are considered one of the most expensive media deals to buy—most are just $1.8 to $3 million per year. Many have wondered how NBC’s current contract with the X Games might look like under a different owner, and the sale
