Comcast Corporation President Mike Kavanaugh (center) at the Allen & Company Sun Valley Conference on July 12, 2023 in Sun Valley, Idaho.
David A. Grogan | CNBC
comcast is considering separating or spinning off its NBCUniversal cable network. If this idea moves forward, it could lay the groundwork for reshaping the entire U.S. media landscape.
Comcast’s logic is very simple. NBCUniversal’s cable network is no longer growing. The company’s energy and focus is on promoting Peacock, NBCUniversal’s growing but still money-losing streaming service. Building a cable portfolio could reassure Comcast investors by removing declining assets from the company’s balance sheet.
Comcast shares rose more than 3% Thursday following the company’s third-quarter earnings report and conference call.
“We are now taking advantage of the opportunities in the changing media landscape by creating a new, well-capitalized company owned by our shareholders and comprised of our strong portfolio of cable networks. “We are exploring whether we can create value for our shareholders,” Comcast said. President Mike Kavanaugh said in a telephone conversation. “We are not yet ready to discuss specifics, but we will contact you again as soon as we reach a firm conclusion.”
Executives emphasized that this exploration is at a very early stage, but it could be a precursor to broader industry consolidation. NBCUniversal’s cable networks, including Bravo, E!, Syfy, Oxygen True Crime, USA Network, and news networks MSNBC and CNBC could merge with another media company or trigger a cable consolidation or consolidation. there is. Different corporate channels.
The idea of rollups is not new. This is something media mogul John Malone discussed when Lionsgate acquired the premium network Starz in 2016.
“Lionsgate could buy Stars or other Free Radicals in the industry.” Malone said at the time.refers to a group of cable networks that are not owned by large media conglomerates, such as AMC Networks, run by the Dolan family, and A&E Networks, co-owned by Hearst and Disney.
That vision never materialized, in part because the media world’s attention shifted from traditional pay TV to streaming, devaluing cable networks. Earlier this year, Warner Bros. Discovery reported $9.1 billion of non-cash goodwill impairment charges caused by the revaluation of the carrying value of the Television Networks segment.
Still, the loss of value in cable networks has created new opportunities for roll-ups for companies like Comcast. warner bros discovery and disney We decided we wanted to reduce our dwindling cable assets in order to focus on streaming.
So far, media companies have chosen to keep cable networks afloat, and even though millions of Americans cut the cord each year, cable networks still make billions of dollars in profits. is producing.
If Comcast spins out and moves forward and its overall ratings skyrocket, it could set the template.
Ironically, Starz could once again play a role in media transformation. The small media company wants to become a vehicle for cable network consolidation, CNBC reported in 2022. The Stars are scheduled to separate from Lionsgate at the end of 2024.
There is great uncertainty as to whether a company consisting solely of a cable network has a path to survival as a publicly traded company. Stock investors typically don’t like their assets to decline, even if they’re cash-rich.
But even if Starz doesn’t achieve its vision of consolidating cable networks, a private equity firm could be interested in acquiring a group of cable networks for cash. Apollo Global ManagementFor one thing, I got interested late. Obtaining Paramount Global has made several media-related investments in recent years. buy yahoo.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
