Comcast Dumping CNBC and MSNBC
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Comcast is planning to break off the bulk of its cable television channels.
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The plan to spin off some NBCUniversal channels includes MSNBC, CNBC, USA, Oxygen, E!, Syfy, and the Golf Channel, while NBC, Bravo, and the streaming service Peacock will remain under NBCUniversal, Comcast president Mike Cavanagh announced in a memo to NBCU employees viewed by Business Insider.
The assets that are part of the planned spinoff generated $7 billion in revenue during the year that ended in September, according to The Wall Street Journal,which first reported that the spinoff was going ahead.
The spinoff, dubbed “SpinCo” for now, which would take about a year, will enable growth in NBCUniversal’s remaining assets, Cavanagh wrote in his memo.
“The well-capitalized, independent company will be positioned to lead in the changing landscape for cable networks given the strength of its portfolio and the quality and focus of its management team,” Cavanagh wrote. “SpinCo will provide a diverse and differentiated content offering that will reach approximately 70 million U.S. households, making it highly attractive to investors, content creators, distributors, consumers, and potential partners. The company will have significant cash flow, a strong balance sheet, and the financial flexibility to pursue growth opportunities, both organically and potentially through acquisitions.”
He wrote that the new entity’s ownership structure would be similar to Comcast’s and that Mark Lazarus, currently chairman of NBCUniversal’s media group, would be named CEO.
Comcast said it was exploring spinning off its cable networks late last month, with BI’s Peter Kafka writing that the move served as yet another signal of cable TV’s decline.
Analysts said Comcast could increase its valuation by selling its cable networks, though they were unsure if it would actually work out, BI previously reported.
“Carving out the US cable networks, which include USA, CNBC, and E!, without Peacock or the NBC broadcast network would be odd,” Michael Hodel, a media analyst at financial-services firm Morningstar, previously wrote. “The cable networks likely have little value on their own. A spinoff would have to be part of a larger strategic move, like merging with another firm.”
Other media giants are wrestling with what to do about their declining traditional TV channels. Disney CEO Bob Iger in the past floated the idea of selling Disney’s TV and cable channels. On its earnings call last week, Disney retreated that idea, though, suggesting that the price wouldn’t be high enough and that it would be too complex to separate them from the rest of the company.
That complexity hovers over Comcast as well. NBCU’s various TV channels are tightly integrated, sharing back-office functions and talent that would have to be untangled, for one.
This article was originally published on November 19 and has been updated with new details of the planned spinoff.
Via: BusinessInsider.com
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