As legacy media navigates the transition from the declining linear business to streaming, Comcast CEO Brian Roberts has taken a bold step: cutting the cord from his media conglomerate’s cable network portfolio.
The move is designed to position NBCUniversal for future growth, jettisoning the assets that are dragging down share value and structuring the spinoff, temporarily called SpinCo, to drive a cash-flow business for as long as cable can hang on.
SpinCo will meanwhile be able to take advantage of opportunities in the shifting media landscape, such as consolidation with other companies’ linear assets, while also releasing value for Comcast’s shareholders.
In a statement, Roberts said the spinoff will “set these businesses up for future growth” and will be “highly attractive to investors, content creators, distributors and potential partners.”
Whether or not that is the case, cable is in decided decline, and observers in the industry noted that Roberts made a move that Disney CEO Bob Iger has not yet had the gumption to do.
“Brian Roberts has big balls,” a veteran producer and former TV executive told TheWrap in unvarnished terms. “He did what Bob Iger threatened to do and still hasn’t done. He’s the last mogul standing.”
Jessica Reif-Erlich, an analyst at Bank of America Securities, called it a “a positive strategic step” for Comcast that would contribute to the parent company’s growth and pave the way “to potentially attempt another large cable merger.”
Tom Rogers, CNBC founder and former Comcast Cable president, told TheWrap: “This is a positive development for the channels enabling them to get the resources to grow, and to better flourish in a streaming TV environment.”
The future NBCUniversal will have almost $40 billion in annual revenue, still making it one of the largest media companies in the world.
SpinCo will house MSNBC, CNBC, USA, Oxygen, E!, Syfy and Golf Channel, as well as digital assets Fandango, Rotten Tomatoes, Golf Now and Sports Engine. It will reach approximately 70 million households. The cable network portfolio generated about $7 billion in revenue for the 12-month period ending Sept. 30 and could have an enterprise value between $12.3 billion and $14.7 billion, according to analysts.
Bravo, which is known for reality TV series such as “The Real Housewives” and is viewed as a primary Peacock “feeder,” will stay with Comcast. Also staying are the streaming service and the NBC broadcast network, NBC Sports, Telemundo, NBCU’s local stations and the company’s film and television studios. Aside from NBCU, Comcast’s other growth drivers will include its theme park, residential broadband, wireless and business services divisions.
Programming from the cable networks outside of Bravo currently make up a “very small percentage” of Peacock content, one insider told TheWrap, with NBC and Bravo being the only two networks that have “next day” deals with Peacock.
The shift continues the rapid rise of CCO Donna Langley, who will become chairman of NBCUniversal Entertainment and Studios, giving her more control over greenlighting projects and oversight of all entertainment programming and marketing across Peacock, Bravo and NBC, including primetime and late night.
“No matter how much uncertainty, change, and revolution Roberts and his conclave heap upon scores of executives and staffers at NBC-Universal, a constant remains: the enormous value and respect accorded to Donna Langley,” former NBC Studios and UPN president Tom Nunan told TheWrap of the executive’s new role. “Roberts is wise to give Langley even more oversight, and a new executive contract. Disney is just down the street, and I hear they’re looking…”
NBCUniversal Media Group chairman Mark Lazarus will lead the new entity as CEO. Anand Kini, Comcast EVP of corporate strategy and NBCU CFO, will serve as the venture’s CFO and chief operating officer, overseeing strategy while also establishing it as a potential partner and acquirer of other complementary media businesses.
The spinoff follows a sea change for cable and linear assets in the entertainment sector. This year has seen a collective $15 billion write-down of linear assets by competitors Paramount Global and Warner Bros Discovery earlier this year. Disney, meanwhile, recorded a $584 million write-down of its entertainment linear networks during its fourth quarter of 2024, and another $721 million in entertainment and international sports linear assets last year.
Roberts’ move comes as other legacy media executives have been unable — or unwilling — to part with their linear assets.
Despite previously calling the linear TV business “non-core” to the company, Iger pushed back against the possibility of linear asset sales earlier this year. At the same time, Disney sacrificed some of its long-tail cable networks, including Freeform and Disney Junior, in its carriage agreement with Charter Communications.
Brian Roberts has big balls. He did what Bob Iger threatened to do and still hasn’t done. He’s the last mogul standing.
— a veteran producer and former TV executive
WBD CEO David Zaslav rejected the idea of splitting off its linear TV business and some of its debt from its studio and streaming businesses, concluding that would lead to lawsuits from the company’s debtholders, an insider previously told TheWrap. He may instead look to pursue smaller asset sales.
But Zaslav has made little secret of his interest in doing possible deals that could lead to further industry consolidation, noting in his recent earnings presentation that the new administration under President-elect Donald Trump could offer a potentially more relaxed regulatory environment — and that WBD could benefit from more industry combinations.
And analysts agree that consolidation could help. “The cable network business is a melting ice cube that is in need of consolidation,” Pivotal Research analyst Jeff Wlodarczak told TheWrap. “[Comcast] spinning this out likely will spur some consolidation.”
It’s unclear what’s to become of Paramount’s linear assets as it prepares for an $8 billion merger with Skydance Media in the first half of 2025. Paramount co-CEOs Brian Robbins, George Cheeks and Chris McCarthy have hired bankers to explore possible asset sales, though incoming president Jeff Shell referred to CBS as a “cornerstone” asset. Paramount has previously floated selling BET and VH1 and is considering selling 12 independent TV stations that may not be core.
A “well-funded startup”
During a meeting on Wednesday, Lazarus told MSNBC staff that there have been no decisions on changes to the network’s name, location or newsgathering operation, an individual familiar with the matter told TheWrap. He is scheduled to meet with CNBC staff on Thursday afternoon.
“I completely empathize with people who think this would be a bittersweet thing,” Lazarus said at the meeting. “It’s exciting because very few times in life you get to have the opportunity to be part of what I’ll call a ‘well-funded startup’ … It’s a once-in-a-lifetime opportunity. I’ve been involved with a lot of big, shiny things for a long time, and I will miss some of that for sure.”
In its third quarter of 2024, Comcast shed 365,000 pay TV subscribers for a total of 12.8 million. Video revenue fell 6.2% year over year to $6.7 billion. Comcast’s media segment reported $650 million in adjusted EBITDA during the third quarter, down 10.1% year over year, and $8.23 billion in revenue, up 36.5%.
Excluding the impact of the Paris Olympics, the media segment posted $6.3 billion in revenue, up 4.9% year over year. Peacock posted a narrowed loss of $436 million during the quarter, a 22% improvement over a $565 million loss in the prior-year period. The streamer’s revenue grew 82% to $1.5 billion, and it added three million paid subscribers for a total of 36 million, up 29%.
Advertisers spent nearly $6.3 billion across Bravo, CNBC, E! Entertainment, Golf Channel, MSNBC, NBC, Oxygen Network, Syfy Channel, Telemundo and USA Network from January to September — a 33% increase compared to the combined $4.7 billion for the same period in 2023, according to MediaRadar’s Vivvix.
Broadcast network NBC accounted for $3.2 billion, just over half of total advertising spend, and saw a 51% year over year growth. USA Network brought in $850 million, up 62%, followed by Bravo with $750 million, up 17%, Telemundo with $367 million, up 7%, E! Entertainment with $334 million, up 2%, MSNBC with $255 million, up 48%, and CNBC with $192 million, down 3%. Bringing up the rear were Golf Channel up 20% with $149 million, Syfy down 30% with $119 million and Oxygen down 28% with $98 million of ad spend.
Total viewership for NBCUniversal’s cable channels declined across the board from 2023 to 2024. Bravo and E! saw a 23% downtick, Oxygen fell 10%, Syfy dropped 6% and USA Network slipped 2%. Despite viewership in the 18-49 demo being up 4% for USA Network, the other networks saw double-digit declines from 2023 to 2024. Bravo slid 28%, E! fell 22% and Oxygen and Syfy each suffered 19% decreases.
To date, USA Network had an average of 678,000 viewers in 2024, while Bravo had 477,000 viewers, E! had 159,000 viewers, Oxygen had 290,000 viewers and Syfy had 273,000 viewers.
NBCU’s leadership shuffle
Aside from Langley’s new elevated role, direct-to-consumer head Matt Strauss will succeed Lazarus as NBCUniversal Media Group chairman, continuing to lead Peacock, international networks and global streaming. Strauss will add NBC Sports, advertising sales, content distribution, decision sciences and research and NBC broadcast affiliate relations to his purview.
Cesar Conde will remain chairman of NBCUniversal News Group.
President Mike Cavanagh’s core leadership team will include current EVP Adam Miller, who will become NBCU’s chief operating officer; Craig Robinson, who will continue as EVP and chief diversity officer; and Kim Harris, who will continue as EVP of Comcast and general counsel of NBCU.
NBCUniversal Entertainment chairman Frances Berwick, who previously reported to Langley and Lazarus, will solely report to Langley under the restructure. The remainder of the reporting structure is still being worked out, the insider said.
Showing investors what works
Comcast’s spinoff will be supported by the media giant’s balance sheet, as opposed to private equity or other outside investors, and will not be loaded up with a lot of debt to ensure it’s well-capitalized, a knowledgeable insider familiar with the matter told TheWrap.
While it will initially serve to shift distressed assets off Comcast’s balance sheet, SpinCo could also be a roll-up vehicle for other companies’ linear TV assets, Wall Street analysts and industry executives previously told TheWrap.
The move will be structured as a tax-free spinoff to Comcast shareholders that will take around a year to complete, subject to final approval from Comcast’s board, completion of “SpinCo” financing and receipt of tax opinions and any regulatory approvals, which would likely have to come from the U.S. Securities and Exchange Commission.
The venture will have a dual class share structure that will see Roberts hold a one-third voting stake, though he will not be on the spun-off entity’s board, the insider added.
The transaction is expected to be accretive to revenue growth at Comcast and not increase Comcast’s debt load. The company does not anticipate any change to its credit profile or ratings as a result of the spinoff.
Sharon Waxman contributed reporting for this article.
