Versant CEO says buying Skydance cable channels would prolong but not improve firm

Versant Media is unlikely to bid for cable channels if Skydance puts any up for sale, chief executive Mark Lazarus said on Tuesday, 20 October in New York.

He was speaking at the Axios Media Trends Live conference, just weeks after Paramount and Warner Bros. Discovery combined to form Skydance. That deal created a company with more than 50 cable networks. Skydance has said it intends to keep them and use their cash flow to pay down debt and invest elsewhere.

Lazarus said he takes that statement at face value. He added that a big cable purchase does not fit Versant right now.

Buying more cable at scale would prolong Versant's life but not necessarily make it better, he said. The reason is secular decline, the industry term for the long, steady drop in cable viewing as audiences move to streaming. Buying large networks that do not change that path is probably not in Versant's short-term future, he said.

That stance matters because Versant was built from cable. The company spun off from Comcast in early January with almost all of NBCUniversal's cable channels except Bravo, and now trades on the Nasdaq. Its line-up includes CNBC, USA and MS NOW, the news channel formerly known as MSNBC, as reported by Deadline.

Skydance is now even heavier in cable. Its $110 billion takeover of Warner Bros. Discovery closed earlier in October, according to Reuters. Executives there have said they aim to hold the networks rather than sell them.

Lazarus said Versant's growth must come from outside cable. Its digital properties include movie-ticketing service Fandango and golf service GolfNow. Together, digital accounts for less than 25% of total company revenue.

He estimated it will take three to five years for digital to become Versant's main source of revenue. The push fits what he told investors last December as a mandate to build beyond cable.

Investors are still waiting to be convinced. Versant shares have fallen 29% since the January debut.

Another practical decision is near. Versant is weighing whether to renew its deal for NBCUniversal to handle its advertising sales, meaning the selling of commercial slots across its channels. The alternatives are to outsource that work to another media company or to bring it in-house. Lazarus said no call has been made.

For viewers, little changes for now. The channels stay where they are. The contest is over what pays for them next.