Comcast has formally unveiled plans to spin out most of its linear cable networks (except Bravo) to shareholders in a separate company, a move that President Mike Cavanagh said puts all of NBCUniversal “on a new growth trajectory.”
Deadline reported many of the details yesterday including leadership of the new entity by NBCUniversal Media Group’s Mark Lazarus and CFO Anand Kini and expanded oversight for Donna Langley, who will become chairman of NBCUniversal Entertainment and Studios.
“Together they will lead the development of an independent strategy, while also establishing SpinCo as a potential partner and acquirer of other complementary media businesses,” Comcast said today,
“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,” said Lazarus.
“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.”
Comcast teased a possible split in late October with Cavanagh calling it “the best path forward for these assets” as the media business transitions from linear to streaming. Cable assets to be carved off include cable channels MSNBC, CNBC, E!, Syfy, Golf Channel, Oxygen and USA as well as digital assets. They will be put into a new company for now called Spin Co.
Bravo, as well as NBC and streamer Peacock, will remain inside Comcast.
The decision comes as streaming has upended entertainment, eroding the reach of linear television. Paramount Global and Warner Bros. Discovery took massive, multi-billion dollar hits this summer to write down the value of their cable business.
Balancing a business that’s declining but still throws off lots of cash with the new streaming imperative has been the top consideration for media companies.
Comcast believes that clustering them outside its core broadband, theme park and studio business is the best way to give the media giant some optionality. It’s one of first dramatic moves by a major media company short of a merger like Paramount’s sale to Skydance.
Now announced, the spinoff is a complicated process that should be complete by the end of 2025.
“When you look at our assets, talented management team and balance sheet strength, we are able to set these businesses up for future growth,” said Brian L. Roberts, Chairman and CEO of Comcast. “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.”
Over the last twelve months ended September 30, Comcast said, SpinCo generated approximately $7 billion in revenue. SpinCo will have the same dual-class share structure as Comcast. As an independent company, SpinCo will be better positioned to achieve long-term growth and create value for stakeholders.”
