CNBC Sport: NBCUniversal strategically leans into sports as it prepares for 'Legendary February'

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NBC is about to have itself a "legendary" month.

"Legendary February," a marketing tagline invented by NBC Chief Marketing Officer Jenny Storms, is all about the sports that will be aired by NBCUniversal, the subsidiary of Comcast. The Milano-Cortina Winter Olympics begin Feb. 6 with the opening ceremonies. That will air on NBC, followed by a two-week slew of Olympics programming.

Just two days after the Olympics coverage starts up, NBC will air the Super Bowl, and, a week later, the network has the NBA All-Star game, a product of the new NBA media rights deal that began this season. The Olympics ends on Feb. 22, and NBC won't just air the closing ceremonies – it also has the Boston Celtics vs. the Los Angeles Lakers that night.

All of the marquee events will air on NBC and on its subscription streaming service, Peacock. 

This doesn't even include the FIFA World Cup, which will air on NBCU's Telemundo this summer, or Major League Baseball, which returns to NBC in March after a three-year hiatus. 

The run of premier sports events will be a major test for NBC after it spent billions of dollars to acquire rights to air them. The return on the investment is judged by a mixture of advertising revenue sold against the events, plus the added distribution value by making NBC a must-have component of any pay-TV bundle, plus the value these events have for its streaming service Peacock in terms of adding and holding monthly subscribers. 

The month of February is a microcosm of the entire company's strategy these days – and a notable turn for the media company in recent years. While Comcast co-CEO Mike Cavanagh says he disagrees, it's hard to argue otherwise: NBC has become a sports-first entity. 

Sports has been a major component of NBC for decades, but it didn't used to be the network's calling card. In the 1990s, NBC stood for "Must See TV," anchored by hits "Seinfeld," "Friends," "Frasier" and "ER."

That run bled into the early 2000s, with another string of hits led by "The Office," "The West Wing," "Friday Night Lights" and "This is Us," along with critical darlings such as "30 Rock," "Parks and Recreation," "Community" and "The Good Place." 

NBC has also always had successful morning shows ("Today"), news programming, and late night shows ("Saturday Night Live," "The Tonight Show"), but ratings have come down for all of those entities as tens of millions of Americans have canceled traditional pay TV during the past 15 years.

The massive cord cutting has, of course, led to a significant change in the business of media. With ownership of Warner Bros. Discovery still in limbo as Paramount Skydance and Netflix jostle for control, NBC suddenly appears subscale.

Netflix, Amazon, Apple and Google/YouTube have balance sheets that dramatically dwarf NBCUniversal's buying power (at least, if those companies choose to spend on TV programming). 

Disney has a $200 billion market valuation – far larger than NBCU, which is just a division of internet giant Comcast, whose entire market cap is just over $100 billion. And NBCU is consciously getting smaller, having just spun off its entire cable network portfolio (including CNBC) other than Bravo.

NBC used to compete with ABC, CBS, Fox and a handful of basic cable networks like TNT, FX and TBS for scripted entertainment. Those days are over. The competition has morphed to include tech streaming giants, and NBC's pocketbook and global reach is simply dwarfed by larger rivals.

"You look at where the competition has come from, at least in the latest media, it's been the entertainment side," NBC Sports head Rick Cordella told CNBC in a recent interview. "For scripted dramas, you see Apple and Netflix and Amazon producing fantastic dramas and other shows. Sports is harder. Sports is relationships. Sports is production. Sports is reach of broadcast. And so we have a little bit of an advantage in the sports category that we may not quite have in other ones."

This isn't to say NBCUniversal can't invest in scripted television at all. The company recently signed "Yellowstone" creator Taylor Sheridan to a five-year deal that begins in 2029 and is worth about $1 billion, according to the Wall Street Journal. 

NBC has also hit some homeruns with unscripted TV, including "The Voice" (which averaged more than 4 million viewers in its 28th season), "America's Got Talent" and Peacock's "Love Island USA." During the summer season, "America's Got Talent" was the highest-rated broadcast show, and the seventh season of "Love Island USA" was the most-watched streaming reality show for nine consecutive weeks. "The Voice" has been the highest-rated unscripted series for the last six seasons.

But NBCU probably no longer has the necessary cash at its disposal relative to the competition to outbid rivals on a bunch of expensive shows each year without losing money. Peacock still loses money, unlike streaming services such as Netflix, Disney+ and HBO Max. 

It's why Comcast was interested in buying WBD's studio and streaming assets, including HBO Max, and merging them with NBCU. 

NBC has decided to go big on sports to keep the pay-TV bundle afloat while also boosting Peacock subs for those who have opted out of cable. Most of the viewership for scripted entertainment – easy to watch on demand – has gone to streaming.

And yet, Cavanagh didn't agree that sports has taken over as NBC's main attraction.

"I wouldn't say that," the recently installed co-CEO said in an interview. "Have you watched 'Stumble'? Have you watched 'St. Denis [Medical]'? We don't want to be a sports-only service. That's not the plan.

"I want the sports team to kill it. I want them to feel like they're the center of the world. I want them to go to the sports media audience and say, 'We're the special thing,'" Cavanagh said. "But if we're sitting in LA talking to [NBCUniversal Entertainment and Studios] Donna [Langley] or [TV Studios Chairman] Pearlena [Igbokwe] or [Bravo & Peacock Unscripted Chairman] Frances Berwick on the reality side with Bravo – we've got special DNA in all of those places, and they're all delivering what the service does today."

Cavanagh has a job to do. He's the leader of all of NBC's divisions, and he, of course, loves all of his children equally. 

Still, just follow the money. NBC's primetime schedule is the lightest it's been on scripted comedies and dramas in its history. "Stumble" is currently the 17th most popular show on NBC (and about 75th overall on TV), averaging about 1.5 million viewers each week, according to Nielsen figures. "St. Denis Medical" averages about 2.4 million viewers per week.

Those numbers are about in line with what NBC gets for a weekly NBA game, but NBC just agreed to spend about $2.5 billion per year for the NBA. The All-Star Game and NBA playoffs will draw far more viewers than a standard regular season game. 

"Sunday Night Football" averaged 23.5 million viewers a game this year. It costs NBC about $2 billion a year – a number sure to skyrocket if and when the NFL renegotiates those rights, which could happen as early as this year.

In the past year, NBC has successfully outbid competitors for both the NBA and MLB's "Sunday Night Baseball." 

Two years ago, NBC paid $110 million for a Peacock-exclusive NFL Wild Card game. The rationale at the time was to spend big on a marquee sporting event and hope that customers would keep subscribing to Peacock after it found its library of movies and original TV series.

In the past year, that strategy has morphed a bit. Now, instead of hoping sports fans stick around to watch Peacock entertainment, NBC has acquired NBA and MLB rights. It's probably a more logical bet that an NFL fan will stick around to watch exclusive NBA and MLB games than keep paying $10.99 each month to watch "St. Denis Medical" or "Stumble."