Comcast is exploring spinning off NBCU Cable Networks into a new company

Comcast is considering spinning off NBCUniversal's cable network portfolio into a new publicly traded company amid upheaval in its TV business caused by cord-cutting.

Comcast President Mike Cavanagh announced the exploratory plans as part of the conglomerate's third-quarter 2024 earnings call. NBCU's cable networks include Oxygen True Crime, Bravo, MSNBC, CNBC, USA Network, E!, Syfy, Universal Kids and Spanish-language channel Universo.

“As you know, we decided earlier this year not to participate in the M&A process surrounding Paramount, but we would consider partnerships in streaming, despite their complexities, and like many of our colleagues in the media industry, we are experiencing the impact. “We have been navigating the transformation of our video business and exploring the best path forward for these assets,” he said.

Cavanagh continued: “To that end, we are now evaluating whether the creation of a new, well-capitalized company owned by our shareholders and comprised of our strong portfolio of cable networks would enable them to capitalize on opportunities in the changing media landscape “To create added value for them.” our shareholders. We are not ready to discuss details yet, but we will get back to you as soon as we reach concrete conclusions.”

Cavanagh said the hypothetical spinoff would include cable television networks and not NBC's broadcast operations. He noted that Comcast is still in the early stages of due diligence on such a transaction.

“There are a lot of questions we don’t have answers to,” he told analysts on the conference call. “So we want to do the work, and we want to do it with transparency all around, so that, as you know, rumors and things like that arise, you know, we expect that, but we want our shareholders to understand what we're looking at.” want. And I think that in times of great change in the industries we operate in, we have a very strong hand given the strength of the companies.”

Cavanagh said: “I think the idea of ​​playing some offense when you combine the balance sheet strength that we have, the assets that we have and the management team that we have, there could be some smart things to do, and We want to study this.” This.”

Given the decline in pay-TV, NBCU has shuttered underperforming cable channels such as Cloo, Esquire and NBC Sports Network over the years.

During the call, Cavanagh declined to comment on what financial impact the cable spinoff might have on Comcast overall, saying it's early days. He identified Comcast's six business segments as its key “growth drivers”: Connectivity (consisting of residential broadband, wireless and business services); theme parks; streaming and premium content; and studios.

“I don’t want to outdo us,” he said. “Of course if we do something like that it will have an impact on the consolidated company. However, we would like to point out that this does not change the fact that today we have six growth drivers in our company that represent more than half of our revenue and are growing at approximately 9% this quarter and on a trailing basis, with this one high single digit value sometimes turns to 10%. So the company is transforming into a high-revenue growth company because our mix changes whether we do something like a spin or not.”

At this point, it's not entirely clear which executive could lead a standalone NBCU cable network company.

Comcast could turn to Donna Langley, a nearly two-decade company veteran who serves as chief content officer and chairwoman of NBCUniversal Studio Group. Langley leads Comcast and NBCU's “unified content strategy” that brings together film and television studios.

Frances Berwick is now Chairman of NBCUniversal Entertainment and is responsible for original content, programming strategy and business operations for NBC and NBCU's six cable entertainment networks: Bravo, E!, Oxygen True Crime, Syfy, USA Network and Universal Kids Original content and acquisitions for Peacock. Cesar Conde is now chairman of NBCUniversal News Group and leads NBC News as well as CNBC, MSNBC, NBC News Now, NBCUniversal Telemundo Enterprises Group and NBCUniversal Local.