Comcast to spin off its cable channels into separate entity
Comcast is moving ahead with its plan to spin off NBCUniversal's cable television channels, including MSNBC and CNBC. The move comes as a response to the growing popularity of streaming services, which has affected traditional cable TV subscriptions and viewership. The company had previously informed investors about considering the move, which would lead to a new entity owned by Comcast's shareholders.
New venture ' to be led by NBCUniversal executives
The new entity, which is tentatively called "SpinCo," will be led by NBCUniversal Chairperson Mark Lazarus. Anand Kini, the CFO of NBCUniversal, will be its financial and operating head. During Comcast's Q3 investor call, President Michael Cavanagh said there could be an opportunity to play some offense with this move.
'SpinCo' positioned for potential acquisitions
'SpinCo' is expected to be well-capitalized and strategically positioned in order to acquire other cable networks in case the industry consolidates. However, Comcast will retain control of NBCUniversal's NBC broadcast television network, its film and TV studios, the theme parks, as well as its Peacock streaming service and Xfinity broadband service.
Spinoff to include profitable cable networks and non-cable services
The spinoff will also include cable news outlets and other cable networks such as USA, E!, Syfy, and the Golf Channel. Non-cable services like Fandango, Rotten Tomatoes, GolfNow, and Sports Engine will also be included in the new company. These networks have stayed profitable despite the challenges in the industry, bringing in around $7 billion in revenue over the past 12 months.
Comcast's spinoff decision follows industry trend
The decision to spin off comes after other major players in the industry have re-evaluated the worth of their television assets. In August, Warner Bros Discovery wrote down the value of its television assets by $9 billion. Paramount Global followed suit, taking a $5.98 billion write-down for its television networks that same month. The separation process is expected to take about a year.
