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Cable spinoff

Comcast to ditch cable TV networks in partial spinoff of NBCUniversal assets

Comcast to spin off USA, CNBC, MSNBC, and others, will keep Peacock streaming.

Jon Brodkin | 92
In this photo illustration, the Comcast logo is displayed on a smartphone with a stock exchange index graph in the background.
Credit: Getty Images | SOPA Images
Credit: Getty Images | SOPA Images
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Comcast today announced plans to spin off NBCUniversal cable TV networks such as USA, CNBC, and MSNBC into a new publicly traded company. Comcast is trying to complete the spinoff in one year, effectively unwinding part of the NBCUniversal acquisition it completed in 2011.

The entities in the planned spinoff generated about $7 billion of revenue in the 12 months that ended September 30, 2024, Comcast said. But cable TV channels have become less lucrative in an industry that's shifting to the streaming model, and the spinoff would let Comcast remove those assets from its earnings reports. Comcast's total revenue in the 12-month period was about $123 billion.

Comcast President Mike Cavanagh said in the Q3 earnings call on October 31 that Comcast is "experiencing the effects of the transition in our video businesses and have been studying the best path forward for these assets."

The spinoff company will be "comprised of a strong portfolio of NBCUniversal's cable television networks, including USA Network, CNBC, MSNBC, Oxygen, E!, SYFY and Golf Channel along with complementary digital assets including Fandango and Rotten Tomatoes, GolfNow and Sports Engine," Comcast said today.

Comcast is keeping the rest of NBCUniversal, including the Peacock streaming service and networks that provide key content for Peacock. Comcast said it will retain NBCUniversal's "leading broadcast and streaming media properties, including NBC entertainment, sports, news and Bravo—which all power Peacock—along with Telemundo, the theme parks business and film and television studios."

SpinCo

The new company doesn't have a permanent name yet and is referred to as "SpinCo" in the Comcast press release. Comcast said SpinCo's CEO will be Mark Lazarus, who is currently chairman of NBCUniversal Media Group. Anand Kini, the current CFO of NBCUniversal and EVP of Corporate Strategy at Comcast, will be CFO and COO at SpinCo.

"When you look at our assets, talented management team and balance sheet strength, we are able to set these businesses up for future growth," Comcast Chairman and CEO Brian Roberts said. "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 Wall Street Journal writes that while cable networks still have "healthy" profits, "years of cord-cutting have taken a heavy toll on subscribers and viewership."

Roberts will own a big chunk of the spinoff. "The new firm will have the same dual-class share structure as Comcast, giving Roberts and his family one-third control of the new company's voting stock," the Los Angeles Times wrote.

Spinoff may try to buy other cable channels

Comcast said the spinoff firm will have some advantages the cable channels don't have in the current Comcast organization. This includes "financial flexibility to pursue growth opportunities," "a dedicated management team with deep sector expertise that can tailor decisions and allocate capital based on the needs of the business," "increased operational focus," and a "dedicated board of directors." Comcast said the transaction will be a tax-free spinoff and that the new entity will have an "attractive capital return policy to drive shareholder value."

The LA Times said its sources indicate the spinoff company might try to buy "other cable outlets to consolidate the new firm's clout in the marketplace." But the report notes a potential problem for SpinCo due to the de-coupling from certain other NBCUniversal assets that Comcast is keeping.

"NBCUniversal distribution executives have long packaged NBC, which boasts 'Sunday Night Football,' with the company's cable channels to maintain its cable programming fees," the LA Times wrote.

However, Comcast plans to keep working with SpinCo for at least a while after the spinoff. "While SpinCo will operate as an independent business, it will enter into a transition services agreement with NBCUniversal to allow SpinCo to operate seamlessly from day one," the Comcast announcement said.

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Jon Brodkin Senior IT Reporter
Jon is a Senior IT Reporter for Ars Technica. He covers the telecom industry, Federal Communications Commission rulemakings, broadband consumer affairs, court cases, and government regulation of the tech industry.
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