What does NBC look like if there’s no buyer and the spinoff completes as expected?

Not a lot different from today. Reasonably profitable, with probably pretty low leverage, because you can put more debt on a cable company than a media company. You could always argue that Comcast’s cable balance sheet made it more able to do things like the NBA contract, but Comcast would say they always looked at that deal on the media business’s capacity to underwrite it—not because they knew they’d separate the business, but because it’s just bad business to pay for the media side with the cable side when there aren’t many linkages. Again, you don’t want to be in the loss-leading business assuming you’ll scale into something over time. That doesn’t typically happen in sports.

Another big story is Fox buying Roku for $22 billion. Who won this deal?

I actually think it’s kind of neutral for both. Fox is a family-controlled company that monetized a large amount of its assets to Disney in 2019 and nicely grew what was left, which is sports and news. They have a very strong balance sheet. So what do you do with the excess cash? You can keep repurchasing shares, which they’ve done when they lacked other opportunities. But from the controlling shareholder’s perspective, do you really need more cash in the bank versus owning a company growing into the streaming era? Roku has very high share and much stronger top-line growth than Fox. So they used the balance sheet to get into an asset different from what they own now—that’s pretty good business.

And from Roku’s perspective, they always face cyclical and market-share challenges, so they had a chance to monetize with a control premium. That’s why I say neutral for both sides. But the thing I should have started with is that this deal does not ooze industrial logic. Taking Fox and Roku and putting them under the same company doesn’t create a meaningfully different Fox or Roku. For Roku users, you’ll maybe see a bit more promotion of Fox content. And Fox gains EBITDA and cashflow, so its ability to pay on something like an NFL renewal improves. But the business itself isn’t meaningfully different. One plus one equals slightly more than two. Contrast that with Paramount Skydance for Warner Bros., where there’s a ton of industrial logic.

Is there any case to be made for Netflix, Apple, or Amazon to get into the broadcast TV business?

The short answer is no. If a regulatory change required certain content like sports to be on broadcast, we could have that debate. But even under Brendan Carr, I don’t think that changes.

Broadcast can be a very good business for other reasons—it generates a lot of cash, and the free-to-air component is particularly interesting. The leagues clearly see importance in broadcast; I think local NFL games will always be on broadcast even as national streaming windows get created, similar to Thursday night with Amazon and now Monday night. But the idea of a streamer buying and managing a linear broadcast business is very unlikely.

On the state of U.S. sports: “One takeaway from the World Cup is that American pro leagues must step up their game dramatically in creating in-stadium atmosphere. Even for big games, the U.S. pro sports atmosphere is garbage compared to what we’re seeing in this World Cup. Only a handful of college football sites come close.” —A media executive

On World Cup coverage: “Fox’s coverage essentially ended Monday night at 7:30 p.m. PT, so I had to turn on Men in Blazers and then ESPN FC to get commentary.” —A journalist

On college chaos: “What exactly has Charlie Baker accomplished outside of giving the Power Four conferences more power and unsuccessfully lobbying Congress? There’s a difference between ‘most of the conversations’ he’s had in total, and conversations he’s had with the Big Ten and SEC about realignment.” —A Varsity subscriber

Have a great week. See you Thursday.

John