Comcast is considering a separation of its cable networks business, as stated by President Mike Cavanagh during the company’s third-quarter earnings call with investors. The potential separation would involve creating a new company owned by shareholders, consisting of Comcast’s cable networks portfolio, excluding NBC and Peacock. The cable networks under NBCUniversal include Bravo, E!, Syfy, Oxygen True Crime, USA Network, MSNBC, and CNBC.
Despite the ongoing trend of customers moving away from traditional pay TV towards streaming services, Comcast has been strengthening its streaming platform Peacock. The exclusive airing of the Summer Olympics in Paris during the third quarter boosted Peacock’s subscriber base to 36 million. Comcast’s revenue from the media segment, mainly NBCUniversal’s TV networks, increased by nearly 37% in the third quarter, primarily due to the Olympics.
The process of exploring a separation is in its early stages, with uncertainties about which networks would be included and whether a spinoff or merger with another entity would be pursued. Comcast aims to conduct the research transparently to address any rumors or confusion. The company lost 365,000 cable TV customers in the third quarter, reflecting a broader industry trend of subscriber losses.
Analysts have welcomed the idea of separating the cable networks business from Comcast, as it could potentially benefit the company’s broadband business. The specifics of the separation and its impact on sports rights contracts remain unclear. NBCUniversal has invested in sports broadcasting rights, including deals with the NFL, English Premier League, and NBA, which could be affected by the separation.
The potential separation of cable networks from NBC and its sports rights could pose challenges, such as the risk of being dropped by pay TV distributors. The impact on the publicly traded entity of the cable networks portfolio is uncertain. Comcast’s exploration of a separation is part of its strategic evaluation of its business assets, including partnerships in the streaming industry.
