Comcast Announces Spin-Off of Most Cable Networks Into New Company to ‘Set These Businesses Up for Future Growth,’ CEO Brian Roberts Says (2024)

Comcast is officially cutting the cord on most of its cable networks.

The company announced a plan Wednesday that will offload the bulk of NBCUniversal‘s financially challenged cable portfolio — excluding Bravo — into a new entity owned by Comcast shareholders. The thinking is the new company will be positioned to acquire other media and digital properties, to gain greater scale in an increasingly streaming-focused landscape. Alternatively, the separation of the NBCU cable group would make it easier to sell the business.

The spin-off company will house MSNBC, CNBC, USA Network, Oxygen, E!, Syfy and Golf Channel. In addition, the company will include digital assets including Fandango and Rotten Tomatoes, online golf-course booking service GolfNow and youth-sports platform SportsEngine. Comcast said it is structured as a tax-free spin-off.

The new NBCU cable TV company — currently dubbed “SpinCo” — will be led by CEO Mark Lazarus, who has served as chairman of NBCUniversal Media Group since July 2023, overseeing the company’s TV and streaming operations.

“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 in a statement. “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.”

Investors, who have been anticipating the move, were not exuberant. Comcast stock was up about 2% in premarket trading, to over $43/share, off its 52-week high of $47.11. In regular trading, Comcast shares closed up 1.6% Wednesday as major market indexes were flat for the day.

Post-spin, NBCUniversal will comprise the NBC broadcast network and stations, the Peacock streaming service, Bravo (the reality TV powerhouse seen as a key to Peacock’s success), NBC News Group, NBC Sports, Telemundo, the Universal theme parks and resorts, and NBCU’s film and television studios. The “new” NBCU will be led by Matt Strauss, who will become chairman of NBCUniversal Media Group overseeing Peacock, NBC Sports, ad sales, distribution, research and affiliate relations; and longtime content executive , expanding her purview to include full oversight of all entertainment programming and marketing across Peacock, Bravo and NBC (including primetime and late night).

Comcast expects the spin-off to close in about one year (i.e. before the end of 2025), contingent on obtaining final approval from Comcast’s board of directors as well as “satisfactory completion of SpinCo financing, receipt of tax opinions and receipt of any regulatory approvals,” the company said.

Yet to be hashed out are some nitty-gritty details. Those include how MSNBC will be separated from NBC News Group, led by Cesar Conde, and how NBCU will split up its advertising-sales division, which currently spans its full TV and streaming lineup.

Comcast said that 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.”

“This transaction positions both SpinCo and NBCUniversal to play offense in a changing media landscape,” Comcast president Mike Cavanagh said in a statement. “Taken together, the entirety of NBCUniversal will be on a new growth trajectory, fueled by our world-class content, technology, IP, properties and talent — all working in concert with each other as an integrated media company.”

News of Comcast’s cable spin-off broke Tuesday, coming less than a month after the company told investors on Oct. 31 it was exploring the scenario. Comcast is not holding a conference call with analysts or press to discuss the planned transaction.

Over the 12 months ended Sept. 30, 2024, SpinCo generated approximately $7 billion in revenue, according to Comcast. SpinCo will have the same dual-class share structure as Comcast, and it will have its own dedicated board of directors.

Roberts will own the same economic and voting interests in SpinCo as he does currently in Comcast, “though he will not serve on the SpinCo board or management team,” according to a memo from Cavanagh to NBCU staff. Roberts owns 100% of Comcast’s Class B common stock representing 33.3% of the combined voting power of the two classes of its voting common stock. As of February 2024, Roberts beneficially owned 31.3 million of Comcast’s Class A shares, less than 1% of outstanding shares.

SpinCo will have a “well-capitalized balance sheet with strong credit metrics,” Comcast said, but it has not yet released a breakdown of what that looks like. The spin-off entity also will offer the “capacity for attractive capital return policy to drive shareholder value,” per the media and cable giant.

Joining Lazarus at SpinCo will be Anand Kini, currently CFO of NBCUniversal and EVP of corporate strategy at Comcast, who is taking on the role of CFO and chief operating officer. Cavanagh said NBCU is commencing a search of “internal and external candidates” for a new CFO.

Lazarus commented: “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. We see a real opportunity to invest and build additional scale, and I’m excited about the growth opportunities this transition will unlock.”