Comcast President Mike Cavanagh attends the Allen & Company Sun Valley Conference on July 12, 2023 in Sun Valley, Idaho.
David A. Grogan | David A. Grogan CNBC
Comcast yes Consider separation or spin-off NBCUniversal’s cable network. If it proceeds with the idea, it could set the stage for a reconfiguration of the entire U.S. media landscape.
Comcast’s logic is fairly 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 out its cable TV portfolio could appease Comcast investors by removing declining assets from its balance sheet.
Comcast shares rose more than 3% Thursday following the company’s third-quarter earnings release and conference call.
Comcast said: “We are now exploring whether creating a new, well-capitalized company owned by our shareholders and comprised of our strong cable network portfolio will enable them to seize opportunities in the changing media landscape and Creating value for our shareholders “We’re not ready to talk about any details yet, but we’ll get back to you when we come to a firm conclusion. “
Although executives stressed that exploration is still in its early stages, it could be a prelude to broader industry consolidation. NBCUniversal’s cable networks, including Bravo, E!, Syfy, Oxygen True Crime and USA Network, as well as news networks MSNBC and CNBC, could merge with another media company or could be the catalyst for a consolidation of cable channels. .
The idea of ​​aggregation is not new. Media mogul John Malone discussed this issue back in 2016 when Lionsgate acquired premium network Starz.
“Lionsgate could acquire Starz and other potential free radicals in the industry,” Malone said at the timerefers to cable network groups that are not part of a large media conglomerate, e.g. AMC Networkscontrolled by the Dolan family or A&E Networks, which is jointly owned by Hearst and Hearst disney.
That vision never materialized, in part because the media world’s shift in attention from traditional pay TV to streaming devalued cable networks. Earlier this year, Warner Bros. Discovery report It took a $9.1 billion non-cash goodwill impairment charge as it revalued the book value of its television networks unit.
Still, the loss of value in cable networks has now created a new consolidation opportunity if companies like Comcast, Warner Bros. Discovery and disney decided to abandon its declining cable assets and instead focus on streaming.
Until now, media companies have chosen to keep their cable networks, which still generate billions of dollars in profits even as millions of Americans cut the cord each year.
If Comcast moves forward and sees its overall valuation soar, it could set a template.
Ironically, Starz may once again play a role in a media shakeup. This small media company wants to be Cable TV network winding vehicleCNBC reported in 2022.
There is widespread uncertainty over whether a company consisting solely of cable networks has a viable path as a publicly traded entity. Stock investors generally don’t like assets falling, even if they are flush with cash.
But even if Starz fails to realize its vision of cable network consolidation, private equity firms may be interested in acquiring a group of cable networks for cash. Apollo Global Managementon the one hand, belated interest in Getting Paramount Worldwide has made a number of media-related investments in recent years, including Acquire Yahoo.
Revealed: Comcast owns NBCUniversal, the parent company of CNBC.
