Wednesday, November 6, 2024

Comcast Says It May Spin Off Cable Networks and Seek a Streaming Partner Amid TV Business Tumult

Must read

During a tumultuous moment for the TV business, NBCUniversal owner Comcast says that it may pursue some major deals to adapt to the changing environment.

For starters, Comcast president Mike Cavanagh said that the company is weighing a spinoff of its cable networks, which include USA Network, Bravo, MSNBC, CNBC and Syfy. He emphasized that the NBC broadcast network and Peacock would remain with the core company.

“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. 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,” Cavanagh told Comcast’s third-quarter earnings conference call on Thursday. “We are not ready to talk about any specifics yet, but we’ll be back to you if and when we reach firm conclusions.”

And he added that the company is interested in seeking a partner for its Peacock streaming service in a bid to grow the business.

“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,” he said.

Spinning out the cable channels would transform the company’s TV business, and would lead to complications for MSNBC and CNBC, which are currently integrated into NBC News. Similarly, shows from Bravo (like Watch What Happens Live and the Real Housewives franchise) are popular on streaming service Peacock.

On the streaming front, while Peacock has acceptable scale (it now has 36 million subscribers), Comcast clearly thinks that working with another partner can make it a more compelling competitor to Netflix. The two logical possible partners are Paramount+ – with executives there openly discussing a partnership – or Warner Bros. Discovery’s Max.

As for the decision to announce their decision to look into the possibilities, Cavanagh said that they wanted to disclose the idea to Wall Street early, rather than have it leak out later.

“The reason we’re announcing here is that we want to study it, there are a lot of questions to which we don’t have answers,” Cavanagh said. “So we want to do the work, 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.”

Latest article