Versant CEO Mark Lazarus joined Semafor Media’s Mixed Signals podcast for his first interview about the new “SpinCo.” Listen here.
Linear television may be dying, but Mark Lazarus believes he has a brief window to turn his declining cable assets into digital media powerhouses.
In the 10 months since NBCUniversal announced that it would spin off its cable television networks, including MSNBC, CNBC, the Golf Channel, and USA, the veteran NBC executive tapped to lead the new company has been working on plans to determine how to invest the profits generated by cable television subscriptions in order to save the brands from irrelevance and extinction.
In a revealing interview, his first since the independent company called Versant began embarking on its uncoupling from NBCUniversal, he offered to Semafor a broad vision for the new enterprise. Lazarus envisions Versant as a bridge between the past and future of media, a company that will use the large but declining cash generated by cable subscriptions to fund acquisition and investment in building the next generation of news and sports media.
“These businesses spin off a lot of cash, a lot of money, they’re very profitable,” he told Semafor. “But our head’s not in the sand about the direction.”
“What’s been going on over the last four or five years at NBCU is we’ve been harvesting that cash and investing it in other things that were priorities at the company, things like theme parks and Peacock and other Comcast initiatives,” he said. “The thesis now is, could we take this cash, keep it inside of these businesses or housed in something that has these businesses in them and actually reinvest in these businesses and give them growth opportunity. Not necessarily that all of a sudden we’re gonna stem the tide of what’s happening with linear TV, but how do we serve those audiences?”
Since NBCU and its chairman Brian Roberts announced that it would be spinning off what was referred to as “Spinco” late last year, many of Lazarus’ subordinates have been largely focused on the complicated details of unwinding several closely intertwined television networks, which shared broadcast resources and the same iconic office space at 30 Rock. But the CEO told Semafor he has dedicated much of his time to planning how the businesses should adapt and grow once the companies gain greater control over their cable profits.
Lazarus said that he wanted the new company to diversify its revenue, aiming to bring in a third of its revenue from cable subscriptions, a third from advertising, and a third from a variety of new digital sources. Lazarus said the best current example within Versant’s portfolio is the Golf Channel, which he said was the most mature of Versant’s businesses, deriving about 50% of its revenue from cable and half from other sources including an app widely used to book tee times at golf courses.
Some of the opportunities will come naturally, he argued.
Lazarus said that due to a strategic decision years earlier, NBC News had deliberately chosen to underinvest in MSNBC’s digital business, meaning the network currently had “no real digital footprint” beyond some text based articles and clips. That will change rapidly in the coming months, Lazarus said.
“We now can invest in a video business with free video and some direct consumer business that we’re working on for that progressive audience that we serve. That’s an investment that wasn’t being made that we will now have the capital to do that and then expand the audience base and hopefully reach not just the people who are current viewers, but people who aren’t current viewers, but who have an affinity for the kind of news and opinion that MS is bringing.”
It won’t be just a direct lift of what we do on air. There will be other opportunity, and I think that’s both an organic investment opportunity around digital.”
Lazarus said that there are some opportunities for organic growth, but that the company will also aggressively pursue acquisitions.
Asked whether he had his eyes on the political startups Crooked Media and the Bulwark, he noted that stars from both companies often appear on MSNBC’s air, and resemble the kinds of businesses that Versant will theoretically be interested in.
“Watch any number of newsletter podcasters that are on MSNBC as guests,” Lazarus said. “Certainly, we’d be interested in the ones that fit our vertical plans.”