Comcast is cutting the cord on its declining cable network portfolio – including MSNBC, CNBC, USA, Oxygen, E!, Syfy and Golf Channel – and will spin off the assets into a standalone, publicly traded company, the company said Wednesday. The company is also shaking up its executive ranks with chief content officer Donna Langley elevated to chairman of NBCUniversal’s entertainment and studios.
The spun-off entity, an estimated $7 billion portfolio based on recent earnings, will also include digital assets Fandango, Rotten Tomatoes, Golf Now and Sports Engin. It is expected to reach 70 million U.S. households. Meanwhile, Bravo, which is known for reality TV series such as “The Real Housewives,” will stay with Comcast, along with Peacock and the NBC broadcast network.
The move will be structured as a tax-free spinoff to Comcast shareholders that will take around a year to complete, subject to final approval from Comcast’s board, completion of “SpinCo” financing and receipt of tax opinions and any regulatory approvals.
The venture will have a dual class share structure that will see Comcast chairman and CEO Brian Roberts hold a one-third voting stake, though he will not be on the spun-off entity’s board, a knowledgeable insider previously told TheWrap.
“When you look at our assets, talented management team and balance sheet strength, we are able to set these businesses up for future growth,” Roberts said in a statement. “With significant financial resources from day one, SpinCo will be ideally positioned for success and highly attractive to investors, content creators, distributors and potential partners.”
The move to shed cable assets mirrors a larger trend within the television industry as viewers flee to streaming platforms and eliminate their cable bills. It follows a collective $15 billion write-down of linear assets by competitors Paramount and Warner Bros Discovery earlier this year, while Disney just recorded a $584 million write-down of its entertainment linear networks during its fourth quarter of 2024.
By creating the new standalone company, Comcast has clearly signaled its conclusion that cable acts as a drag on the NBCUniversal share value.
Comcast sets SpinCo leadership team
NBCUniversal Media Group chairman Mark Lazarus will lead SpinCo as CEO, while Comcast executive vice president of corporate strategy and NBCU chief financial officer Anand Kini will serve as the venture’s CFO and chief operating officer, overseeing the entity’s independent strategy while also establishing it as a potential partner and acquirer of other complementary media businesses. The pair will project manage the transition while continuing to serve in their regular responsibilities.
“As a standalone company with these outstanding assets, we will be better positioned to serve our audiences and drive shareholder returns in this incredibly dynamic media environment across news, sports and entertainment,” Lazarus said in a statement. “We see a real opportunity to invest and build additional scale and I’m excited about the growth opportunities this transition will unlock. Our financial strength will also provide capacity for an attractive capital return policy while allowing for investment in the growth of these businesses.”
In connection with Kini’s transition to SpinCo, Comcast is launching a search of internal and external candidates for a new chief financial officer.
Meanwhile, Chief Content Officer Donna Langley will become chairman of NBCUniversal Entertainment and Studios, where she will have full oversight of entertainment programming and marketing across Peacock, Bravo and NBC —including primetime and late night — and will continue to oversee global creative strategy, business operations, production, acquisitions, marketing, and distribution for the company’s film and television studios.
Direct-to-consumer head Matt Strauss will succeed Lazarus as NBCUniversal Media Group chairman, continuing to lead Peacock, international networks and global streaming, while adding NBC Sports, advertising sales, content distribution, decision sciences & research and NBC broadcast affiliate relations to his purview.
Cesar Conde will remain chairman of NBCUniversal News Group, overseeing NBC News, NBC News Now, Telemundo Enterprises, NBCU Local stations, while Mark Woodbury will continue as chairman and CEO of Universal Destinations & Experiences.
The restructure means that news boss Conde will lose authority over significant media assets including MSNBC and CNBC. Many questions remain about what the relationship may or may not be between NBC News and the cable news channels – MSNBC in particular has been beleaguered by cratering ratings in the post-election days – after the spin-off.
Lazarus will address the CNBC newsroom on Thursday, TheWrap has learned.
Cavanagh’s core leadership team will include current executive vice president Adam Miller, who will become NBCU’s chief operating officer; Craig Robinson who will continue as executive vice president and chief diversity officer; and Kim Harris, who will continue as executive vice president of Comcast and general counsel of NBCU.
Playing Offense
Comcast first revealed it was studying a potential cable portfolio spinoff during its third quarter earnings call last month. That portfolio generated around $7 billion in revenue for the 12-month period ending Sept. 30.
The future NBCUniversal will have almost $40 billion in annual revenue, making it one of the largest media companies in the world.
“This transaction positions both SpinCo and NBCUniversal to play offense in a changing media landscape,” Comcast president Mike Cavanagh said Wednesday. “Taken together, the entirety of NBCUniversal will be on a new growth trajectory, fueled by our world-class content, technology, IP, properties and talent – all working in concert with each other as an integrated media company.”
The transaction is expected to be accretive to revenue growth at Comcast and approximately neutral to Comcast’s leverage position. The company does not anticipate any change to its credit profile or ratings as a result of the spinoff.
Analysts and industry executives previously told TheWrap that a Comcast cable network spinoff could be an opportunity to create a roll-up vehicle for other companies’ distressed linear TV assets suffering from cord-cutting as consumers shift to streaming.
Cable’s Inexorable Decline
In its third quarter of 2024, Comcast shed 365,000 pay TV subscribers for a total of 12.8 million, with video revenue falling 6.2% year over year to $6.7 billion.
Overall media revenue shot up 36.5% to $8.23 billion due to higher domestic advertising and domestic distribution revenue. Excluding the impact of the Olympics, media revenue increased 4.9% to $6.34 billion.
The Paris Olympics and additional Peacock sales fueled domestic advertising revenue growth of 74.9% to $3.35 billion, which was partially offset by lower revenue at the company’s networks. Domestic distribution revenue climbed 26.3% to $3.27 billion, which primarily reflected the broadcast of the Paris Olympics and higher revenue at Peacock. International networks revenue rose 5% to $1.07 billion due to the positive impact of foreign currency and an increase in revenue associated with the distribution of sports networks. Other revenue grew 7.2% to $542 million, primarily due to an increase in revenue from content licensing.
Adjusted EBITDA for the media segment fell 10% to $650 million, due to higher operating expenses from increased sports programming costs associated with the Olympics, higher programming costs at Peacock and an increase in other sports programming costs for domestic television networks.
Shares of Comcast were up 0.7% in pre-market trading on Wednesday following the official announcement.
