Comcast Corporation (NASDAQ: CMCSA) is moving forward with a plan to spin off its cable TV networks, including MSNBC, CNBC, USA, E!, Syfy, and Golf Channel. The decision is part of the company’s broader strategy to reduce its exposure to a traditional cable business that has been losing both viewers and advertisers due to the rapid rise of streaming platforms like Netflix and Amazon Prime.
The newly created entity, referred to as "SpinCo", will operate independently, with NBCUniversal Media Group's Mark Lazarus appointed as CEO. Comcast will maintain control of its NBC broadcast network, its popular Peacock streaming service, and its film and TV studios. Bravo, another major channel, will also remain with Comcast.
The cable networks that are being spun off generated approximately US$7bn in revenue over the past year, but they have faced mounting challenges in the face of cord-cutting trends. Comcast President Mike Cavanagh expressed optimism that the spin-off will position both Comcast and SpinCo for future growth by giving each business more flexibility in a rapidly changing media environment. “We think there could be an opportunity to play some offense,” said Cavanagh during a recent earnings call.
The spin-off is expected to take around a year to complete, with SpinCo inheriting not only the cable networks but also digital assets like Fandango, Rotten Tomatoes, and GolfNow. The move will leave Comcast better positioned to focus on its core assets, including its broadband business, theme parks, and streaming ventures.
The decision to spin off the cable networks follows a trend among media companies to reevaluate their traditional assets in the wake of the explosive growth of streaming. Both Paramount Global and Warner Bros. Discovery have already written down the value of their cable networks, as their viewers continue to migrate online.
SpinCo, which will have a strong balance sheet and the potential for acquisitions, aims to build additional scale in the media industry. Comcast executives believe that this separation will allow SpinCo to become an attractive partner for other media businesses and help reinvigorate the cable network model.
