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Viacom weighs an entry into sports programming

Under Viacom CEO Bob Bakish, the company has pursued a new strategy of becoming a broader provider of content to third parties.

Viacom has held discussions with multiple parties about providing programming to the regional sports networks that are being sold by Disney and Fox, according to two sources familiar with conversations.

If talks progress, it would be a significant move for Viacom, which owns Paramount Pictures, MTV and Nickelodeon and has previously catered to younger viewers through its cable channels.

Under Viacom CEO Bob Bakish, the company has pursued a new strategy of becoming a broader provider of content to third parties. Viacom’s Paramount Television made the thriller series “Jack Ryan” for Amazon Prime, while its youth-focused AwesomenessTV production company made the Netflix hit series “To All the Boys I’ve Loved Before.” It is remaking MTV reality show “The Real World” for Facebook.

Viacom executives have been approached by several bidders for the sports networks that are for sale, according to one person familiar with the talks who was not authorized to speak publicly. Viacom is not discussing acquiring equity in the networks, the person said.

One of the bidders, Big3, a three-on-three basketball league co-founded by rapper Ice Cube, has talked to Viacom about the possibility of creating programming that would bring the 22 disparate regional sports networks together as a national business for the first time, according to one person familiar with the discussions who was not authorized to speak publicly. The networks, currently owned by Fox, cater to local sports fans in Atlanta, Detroit and Miami, among other cities.

Representatives for Viacom and Big3 declined comment.

Bankers from Allen & Co. and J.P. Morgan Chase have been pitching the networks to prospective bidders on behalf of Disney, which is acquiring them as part of its $71 billion acquisition of 21st Century Fox assets. Disney, which owns ESPN, must sell the sports networks to gain regulatory approval for its deal.

Big3, which in addition to Ice Cube includes Hollywood entrepreneur Jeff Kwatinetz as a co-founder, hopes to have sports personalities touch on controversial topics such as the intersection of sports and politics — something that ESPN has recently moved away from. The dominant sports network parted ways with journalist and host Jemele Hill after she made several political comments.

One source said the Big3 bid included a variety of parties, including Serena Williams. A representative for the tennis star did not respond for comment.

The regional sports networks are seen as good businesses since they command high fees from distributors such as cable operators. One person directly involved in the talks said the affiliate fees average $4 per month, per subscriber. Still, owners have to weigh the increasing cost of sports rights and the likelihood of recouping those license fees through advertising and subscription fees.

One person familiar with the Big3 bid said that goal would be to expand beyond live sports to include content that would appeal to younger audiences — something that Viacom could help with.

“There will be programming beyond the games to help bring appeal to millennials and Generation Z,” the person said. “Baseball needs to get younger fans.”

Several parties have expressed an interest in the sports networks, which have revenues of around $2 billion. They include Amazon, Sinclair Broadcasting and cable system Altice. The Wall Street Journal reported that the New York Yankees have held talks about buying back the 80 percent of the YES Network, the regional sports channel that airs the team’s games.