NBC’s suite of cable channels are about to find themselves detached from the mother ship.
As was floated by Comcast executives during an earnings call in late October, the company will reportedly spinoff its NBCUniversal cable assets per a report in Wall Street Journal on Tuesday evening. An official announcement is expected Wednesday.
The move will include its news assets MSNBC and CNBC, entertainment assets USA, Oxygen, E!, and Syfy, and its lone remaining sports cable network Golf Channel. Bravo, home of the successful Real Housewives franchise, will remain under Comcast’s corporate structure along with Peacock and the NBC broadcast network.
The cohort of channels set for a spinoff generated $7 billion in revenue between September 30th, 2023 to September 30th, 2024.
A host of changes in the executive ranks will accompany the move. Mark Lazarus, chairman of NBCUniversal’s media group, will be named CEO of the new entity and take NBCU CFO Anand Kini with him to be COO and CFO. Current chief content officer Donna Langley and the head of Comcast’s direct-to-consumer business Matt Strauss will replace Lazarus as chairman of NBCUniversal. Strauss will oversee sports.
Per the Wall Street Journal, the new venture is seen as a way to position NBCUniversal for future growth without being tied to the declining cable business. Comcast, given its well diversified portfolio in movies, theme parks, and as a cable operator, is likely in a better position than most to sacrifice its still wildly profitable cable channels without hurting its balance sheet.
The spun off entity could prove a candidate for future mergers and acquisitions. Plenty of industry watchers have speculated that private equity could take interest in declining cable assets while they’re still profitable. And there are surely networks out there that could be interested in joining up with the new entity if such a sale seems imminent.
The Wall Street Journal report states that the transaction, which will be structured as a tax-free spinoff to Comcast shareholders, will take around a year to complete.
Many saw Comcast’s suggestion last month that it could spin off or sell its cable asset as simply a trial balloon, but it seems that CEO Brian Roberts was much further along regarding this move than anticipated.
It will be interesting to see how the market values a company full of name-brand assets that are nonetheless in secular decline.
Specifically, fans of golf (Golf Channel), Premier League soccer (USA), and track and field (which frequently airs on CNBC) could be most impacted by this move.
While legacy media companies have long toyed with the idea of divesting cable assets, Comcast is the first to actually pull the trigger. Depending on how this move shapes up, it could open the door for others to follow suit.
About Drew Lerner
Drew Lerner is a staff writer for Awful Announcing and an aspiring cable subscriber. He previously covered sports media for Sports Media Watch. Future beat writer for the Oasis reunion tour.