Comcast announced plans to spin off its NBCUniversal cable networks. The deal could change how Comcast's media and internet businesses are bundled and sold.
The newly-independent "SpinCo" would immediately be a significant player in the news, sports, and entertainment sectors, reaching about 70 million U.S. households. SpinCo will include networks like USA Network, CNBC, MSNBC, Oxygen, E!, SYFY, and Golf Channel, along with digital assets like Fandango, Rotten Tomatoes, GolfNow, and Sports Engine. The change is planned to be completed within approximately one year. Comcast will keep its focus on core businesses, including residential broadband, wireless, business services, and NBCUniversal's streaming, studios, and theme parks.
Comcast currently uses its internet and phone services to bolster its media business, and vice-versa. For example, when the Peacock streaming service was first introduced, it was free for most Xfinity TV and internet subscribers (because Comcast needed high subscriber numbers to show investors). The two divisions splitting could mean the end of similar bundling deals, like how AT&T dropped free HBO Max subscriptions from its phone plans when AT&T sold its Warner division.
The separation depends on some usual conditions, such as getting the thumbs up from the Comcast Board of Directors, securing funding for SpinCo, receiving tax advice, and obtaining necessary regulatory approvals. The new company will have its own board of directors and management team to oversee how it runs. There could be some changes as the deal goes through because it's a big company making a huge change. However, the deal is set up to help both SpinCo and Comcast, and it's not futher consolidation of the media industry.
The assets that will make up SpinCo made about $7 billion in revenue over the year leading up to September 30, 2024. So, they are already proven to make money. The new company will have two types of shares, just like Comcast does. Mike Cavanagh, President of Comcast said, "This transaction positions both SpinCo and NBCUniversal to play offense in a changing media landscape. Taken together, the entirety of NBCUniversal will be on a new growth trajectory, fueled by our world-class content, technology, IP, properties and talent - all working in concert with each other as an integrated media company."
Source: Comcast