Comcast Exploring Spinoff of NBCU Cable Networks Into New Company

Comcast, amid the upheaval in the TV biz caused by cord-cutting, is considering spinning off NBCUniversal‘s portfolio of cable networks into a new publicly traded company.

Comcast president Mike Cavanagh announced the exploratory plans on the conglomerate’s Q3 2024 earnings call. NBCU’s cable networks include Bravo, MSNBC, CNBC, USA Network, E!, Syfy, Oxygen True Crime, Universal Kids and Spanish-language channel Universo.

“As you know, we chose not to participate in the M&A process around Paramount in the earlier part of this year, but we would consider partnerships in streaming despite their complexities, and like many of our peers in media, we are experiencing the effects of the transition in our video businesses, and have been studying the best path forward for these assets,” he said.

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Cavanagh continued, “To that end, we are now exploring whether creating a new well-capitalized company owned by our shareholders and comprised of our strong portfolio of cable networks would position them to take advantage of opportunities in the changing media landscape and create value for our shareholders. We are not ready to talk about any specifics yet, but we’ll be back to you as and when we reach firm conclusions.”

Cavanagh said the hypothetical spinoff would include cable TV networks and not NBC’s broadcast operations. He indicated Comcast is still early in the process of doing the due diligence about such a transaction.

“There are a lot of questions to which we don’t have answers,” he told analysts on the call. “So we want to do the work, and want to do the work, you know, with transparency around it, so that, as you know, rumors fly and the like, you know, we expect that, but we want our shareholders to understand what we’re willing to look at. And I do think in the moment of a lot of transition in in the industries we’re a part of, I think we’ve got a very strong hand, given the strength of the businesses.”

Said Cavanagh: “I think the idea of playing some offense, when you combine the balance sheet strength that we have, the assets we have, and the management team we have, there may be some smart things to do, and we want to study that.”

With the contraction in the pay-TV environment, NBCU has over the years shut down underperforming cablers like G4, Cloo, Esquire Network and NBC Sports Network (NBCSN) in contrast to some of its peers.

On the call, Cavanagh declined to comment on what the financial impact of spinning off the cable networks could be on Comcast overall, saying it’s still early days. He called out Comcast’s six businesses that represent its key “growth drivers”: connectivity (comprising residential broadband, wireless and business services); theme parks; streaming and premium content; and studios.

“I don’t want to get ahead of ourselves,” he said. “Obviously, we do anything like that, it will have an impact on the consolidated company. But I think the point that we’d make is that it doesn’t change the fact that within the business today, we’ve got six growth drivers that represent more than half our revenues, that are growing this quarter at 9% or so and on a trailing basis, spinning that high single digit to sometimes 10%. So the company is transforming itself to a top-line growing company as our mix changes, whether we do something like a spin or not.”

At this point, which exec might head up a stand-alone NBCU cable network company is not entirely clear.

Comcast could turn to Donna Langley, a nearly two-decade company veteran who serves as chief content officer and chairman of NBCUniversal Studio Group. Langley leads Comcast and NBCU’s “unified content strategy,” bringing together film and TV studios.

Meanwhile, Frances Berwick is chairman of NBCUniversal Entertainment, in charge of original content, program strategy and business operations for NBC and NBCU’s six cable entertainment networks: Bravo, E!, Oxygen True Crime, Syfy, USA Network and Universal Kids, as well as original content and acquisitions for Peacock. Meanwhile, Cesar Conde is chairman of the NBCUniversal News Group, overseeing of NBC News as well as CNBC, MSNBC, NBC News Now, NBCUniversal Telemundo Enterprises Group and NBCUniversal Local.

— Brian Steinberg contributed to this article.