Versant Media (VSNT) Q3 2026 earnings review
Versant Media raises its cash outlook, while television profit falls
Versant Media, the cable and digital business spun off from Comcast, generated strong cash flow even as television revenue shrank. Sales from businesses kept in both periods slipped 4%, while Fandango lifted underlying digital platform growth to 17%. Operating profit before depreciation and one-offs fell 7% against last year's standalone figure on higher sports-rights bills, yet finance chief Anand Kini raised the full-year cash flow outlook after nine-month free cash flow beat the old $1.2 billion ceiling.
| Revenue ex SportsEngine and Full Swing | $1,569M -3.5% from a year ago (reported: -4.2%) |
|---|---|
| Platforms revenue ex M&A | $222M +17.4% from a year ago (up from +9.3% in Q2) |
| Adjusted EBITDA (vs standalone prior year) | $353M -7.4% from a year ago (reported: -20.9%) |
| Full-year free cash flow outlook | Raised to exceed $1.0–1.2B (9M actual: $1.21B) |
⚖️ Verdict: 🟢 Bullish
The story got better because Versant removed its two biggest near-term worries: second-half cash generation and cable carriage renewals. Chief executive Mark Lazarus finished all planned pay-TV renewals for the year with channel fee declines holding near 6%, and Fandango's acceleration showed the digital division can grow fast without SportsEngine. One caution: missing the biennial Ryder Cup pushed ad sales down 5%, and keeping the full-year profit plan unchanged implies fourth-quarter operating profit dropping 44% at the middle of the range by our math.
The question now is whether the unchanged full-year profit plan is just cautious or signals a steep fourth-quarter bill for new sports rights. Either Versant beats its profit range as it did on cash flow, or sports inflation cuts deeply into margins. Fourth-quarter programming costs and operating profit will settle it.
🐂 Bull Case
Fandango Lifted Underlying Platform Growth to 17%
Versant Media, the cable network and digital group spun off from Comcast in January, relies on its Platforms unit to offset shrinking cable television fees. The division includes movie ticketer Fandango, golf-booking service GolfNow, and review site Rotten Tomatoes. Reported division sales rose 9.6% from a year ago to $245 million because the second-quarter sale of youth-sports software SportsEngine masked faster underlying gains.
Sales from platform businesses owned in both periods — stripping out $35 million from SportsEngine last year and $23 million from newly acquired golf-simulator maker Full Swing this quarter — jumped 17.4% to $222 million. That accelerated from 9.3% growth in the second quarter. Versant credited "movie ticket purchases and sales from our new cinema operating platform", known as Fandango1, along with home entertainment sales.
What to watch: fourth-quarter underlying platform growth, which arrives with full-year results. Staying in double digits when theatre attendance changes would show Fandango1 and GolfNow add steady revenue.
Nine-Month Cash Flow Topped the Full-Year Target
Coming into the quarter, Versant's $1.0 billion to $1.2 billion full-year free cash flow plan implied just $92 million to $292 million for the entire second half, by our math. Instead, the company generated $302 million in the third quarter alone. That brought nine-month free cash flow — operating cash flow minus capital spending — to $1.21 billion, beating the top of the old annual target with one quarter left.
Finance chief Anand Kini said "we expect Free Cash Flow 1 to exceed our prior $1.0 to $1.2 billion forecast", though he did not set a new dollar range. The cash surge covered the third quarter's $100 million accelerated share repurchase (ASR), a bank contract to buy back stock immediately, and let Versant plan another $100 million buyback for the fourth quarter.
What to watch: fourth-quarter free cash flow, implied by our math to turn negative or stay small if tax and capital-spending bills arrive late in the year. A positive fourth-quarter reading would show the annual cash run-rate sits well above $1.2 billion.
Pay-TV Renewals Finished and Losses Stayed Steady
Linear distribution — the monthly fees cable and satellite operators pay to carry channels such as CNBC, USA Network, and Golf Channel — makes up 59% of Versant's revenue. Those fees fell 5.8% from a year ago to $935 million as cord-cutting continued, partly offset by contractual price increases. The drop improved slightly from declines of 7.3% in the first quarter and 6.2% in the second.
Chief executive Mark Lazarus pointed to the "completion of all planned pay television distribution renewals for the year", removing the near-term risk that a distributor drops Versant's entertainment channels. What to watch: first-quarter 2027 linear distribution revenue, when the new multi-year carriage agreements take full effect and show whether annual fee declines can stay near 6%.
🐻 Bear Case
New Sports Rights Squeezed Third-Quarter Profit Margins
Versant has been buying live sports rights, including the WNBA and NASCAR, to keep viewers on its cable networks and feed its digital apps. Viewership of the WNBA's first season on USA Network rose 25% against the prior year's cable average, and Golf Channel recorded its most-watched PGA Tour season since 2018. But those rights arrive heaviest in the second half of the year and carry a steep bill.
- Adjusted EBITDA (operating profit before depreciation, taxes, and one-offs): $353 million, down 7.4% from $381 million on a standalone basis a year ago
- Adjusted EBITDA margin: 22% of revenue, down from 23% a year ago and 38% in the second quarter
- Programming and production costs (the cost of airing shows and sports): 46.2% of revenue, up 1.4 percentage points from a year ago by our math
- Other costs of revenue: 8.9% of revenue, up 1.2 percentage points, while overhead fell 1.9 points to 22.7% on a standalone basis
Costs for shows and live sports "reflect costs related to additional sports rights compared to the prior year period", the company said. Maintaining the full-year profit outlook leaves implied fourth-quarter Adjusted EBITDA at $219 million to $369 million by our math, down 44% at the middle of the range from $521 million a year ago. Either the outlook is very cautious, or fourth-quarter sports bills will cut profit further.
What to watch: fourth-quarter programming and production costs in the full-year report. A drop in fourth-quarter profit toward the $294 million middle of the implied range would show sports inflation is outrunning savings in overhead.
Missing Ryder Cup Pushed Advertising Down 5%
Advertising revenue had nearly stabilised in the second quarter, dipping just 0.6% from a year ago after a 5.2% drop in the first quarter. In the third quarter, Lazarus highlighted that total network viewership grew by double digits from a year ago and political network MS NOW logged its eleventh straight month of audience gains. Despite the bigger audiences, advertising revenue fell 5.3% to $373 million.
The company said the drop was "reflecting the event timing impact of the Ryder Cup in the prior year", a biennial golf tournament that did not repeat in 2026. The step-back shows that higher ratings on news and entertainment channels could not make up for a missing marquee golf event. What to watch: fourth-quarter advertising revenue, when midterm election spending on MS NOW tests whether news audiences turn into ad dollars.
Acquisitions Outpaced Buybacks and Raised Net Debt
Versant is buying digital businesses and building direct-to-consumer apps to reduce its reliance on cable television. In the third quarter it closed the purchase of golf-technology firm Full Swing and launched MS NOW Membership, a paid digital community "creating new ways to engage audiences beyond television". Across the first nine months, cash spent acquiring businesses reached $696 million — about $551 million of it in the third quarter by our math — more than double the $300 million spent on share buybacks.
Full Swing added $24 million to third-quarter revenue, while Versant gave no profit figure for the acquisition and no pricing or subscriber numbers for MS NOW Membership. Because acquisition spending exceeded the quarter's free cash flow, net debt (total debt minus cash) rose by $399 million from the second quarter to $1.88 billion by our math. What to watch: Full Swing's first full-quarter revenue contribution in the fourth-quarter report, which will show the annual revenue run-rate bought for over $500 million.
Risks this quarter didn't answer
Four standing concerns from earlier quarters received no new figures in the third-quarter earnings release.
- Non-pay-TV revenue share: not updated in the release; the full-year report will test progress toward the 33% medium-term goal.
- Pay-TV subscriber counts and renewal rate increases: undisclosed; management stated all 2026 renewals are complete without giving the underlying subscriber loss rate.
- NBCUniversal ad-sales agreement: no update on whether Versant will renew or bring ad sales in-house when the two-year post-separation contract ends.
- Dual-class voting control: 377,775 Class B shares remain outstanding, holding one-third of total voting power.
💲 Other KPIs
Receivables — money owed by customers and distributors for ads and carriage fees already billed — rose 7.8% from $1,151 million at the end of 2025, even as nine-month revenue fell 3.0%. That build-up absorbed $392 million of operating cash flow over the first nine months following the separation from Comcast.
Deferred revenue — cash collected from customers ahead of delivering the service — grew 16.9% from $83 million in the second quarter, after rising 7.8% between the first and second quarters. While still under 2% of annual sales, it has grown in both quarters since the spin-off.
Total Class A and Class B shares fell 1.8% from 139.2 million at the end of June after Versant retired about 2.6 million Class A shares under its third-quarter $100 million buyback agreement, at an average price of $38.46 per share by our math.
🔮 Guidance
Unchanged. The plan still calls for revenue to fall 5.4% at the middle of the range from $6.69 billion in 2025. With $4.93 billion booked in the first nine months, the outlook leaves $1.28 billion to $1.53 billion for the fourth quarter by our math — a drop of 5.3% at the top of the range and 13.0% at the middle, partly reflecting the sale of SportsEngine.
Unchanged. At the $1.975 billion middle of the range, full-year profit before depreciation, taxes, and one-offs falls 9.4% from 2025's $2.18 billion standalone figure. By our math, that leaves $219 million to $369 million for the fourth quarter, or a 21.0% margin at the middle of the range — down from 32.4% a year ago as sports-rights costs peak.
Raised. The cable and digital group now expects full-year free cash flow to beat its earlier $1.0 billion to $1.2 billion range. Because nine-month free cash flow already reached $1.21 billion after a $302 million third quarter, any positive cash generation in the fourth quarter will add directly to the beat.
New. Versant plans to enter a fourth consecutive $100 million accelerated share repurchase on November 4, 2026, and complete it during the fourth quarter. That will bring 2026 buybacks to $400 million and leave about $600 million under its $1 billion authorisation.
❓ Key Questions
Why keep a full-year profit target that implies a 44% fourth-quarter drop?
Nine-month Adjusted EBITDA of $1.68 billion leaves just $294 million at the middle of the full-year range for the fourth quarter, versus $521 million a year ago. How much of that gap is fourth-quarter sports-rights costs versus caution in the outlook?
What profit and annual revenue does Full Swing bring for ~$550 million?
Cash spent on business acquisitions jumped by $551 million in the third quarter as Full Swing closed, while Full Swing added $24 million to quarterly revenue. Management has not disclosed the business's full-year revenue run-rate or profit margin.
What are the pricing and subscriber targets for MS NOW Membership and CNBC?
Versant launched MS NOW Membership before the midterm elections and plans CNBC's direct-to-consumer service early next year, but has not given subscription prices, development costs, or how much revenue they can add toward its non-pay-TV mix goal.
What rate increases did Versant secure in its completed 2026 pay-TV renewals?
All planned 2026 carriage renewals are now finished and linear distribution declines held near 6%. Knowing the new contractual rate escalators and underlying subscriber loss rate would show whether that pace holds in 2027.