Comcast to spin off cable networks that were once the entertainment giant’s star performers

WASHINGTON — Comcast is turning into a new company, many of the cable TV networks that were once the heart of the entertainment giant, as consumers increasingly are trading in their cable TV subscriptions for streaming platforms.

Former stars for Comcast’s NBCUniversal cable television networks include USA, Oxygen, E!, SYFY and Golf Channel, as well as CNBC and MSNBC. Movie ticketing platform Fandango and movie rating site Rotten Tomatoes will also become part of the new company.

Streaming service Peacock will remain with Comcast, as will Bravo, which provides significant content for the Peacock streaming service, and other assets such as NBCUniversal’s studios and theme parks.

Comcast telegraphed the shift last month, before confirming Wednesday that it will spin off assets that generated about $7 billion in revenue over the past 12 months ended Sept. 30. That’s about 5.5% of Comcast’s total revenue in that period, according to the company.

It is not yet clear exactly what consequences this split will have for customers. Experts say it’s too early to say as Comcast aims to complete the transition in the coming year.

Some analysts speculate that the spun-off networks may have more freedom to take their content elsewhere. That could mean more options for finding and managing what to watch and where – or a headache juggling different subscriptions in an already fragmented media landscape.

Wednesday’s announcement comes as more and more people are cutting the cable cord, with millions of people canceling service subscriptions every year — and signing up for streaming platforms instead.

Paul Verna, principal analyst and vice president of content for market research firm eMarketer, said Comcast’s decision to get rid of most cable TV channels reflects that trend.

“The writing is on the wall that the cable TV industry is a declining business,” Verna said. “That’s why Comcast did what it did today.”

Mike Proulx, vice president and director of research at Forrester, added that the spinoff “simply marks a reconciliation of assets that detracts from the company’s inevitable future.”

Comcast expects the new company, which it named “SpinCo” on Wednesday, will have the financial flexibility to be “a potential partner and acquirer of other complementary media companies.” And Mark Lazarus, the current chairman of NBCUniversal Media Group, who will serve as CEO of the new entity, said Wednesday that the standalone company “will be better positioned to serve our audiences and increase shareholder returns.”

Like other cable companies, Comcast has shifted its business emphasis from traditional cable to streaming and other sources of revenue in recent years, such as its movie studio, theme parks and wireless home and Internet services.

Despite a somewhat confusing, stuttering start, Peacock has been one of the company’s biggest success stories, with recent boosts driven in part by the streaming platform’s popularity during the 2024 Paris Olympics. In the most recent quarter, Comcast reported that the number of paying Peacock subscribers increased by 3 million, or 29%, to 36 million subscribers. Peacock’s revenue rose 82% to $1.5 billion in the period.

Dropping “money-losing assets” to focus instead on these types of lucrative businesses is clearly beneficial for Comcast, Verna said – but the future of a new company that primarily houses cable networks is less promising. He said he finds it difficult “to imagine this company remaining independent for a long time,” predicting future consolidation of the networks or acquisitions through private equity.

Howard Gutman, private equity strategy and coverage leader at MorganFranklin Consulting, also expects consolidation to be on the horizon. He noted that the spinoff could entice larger streaming services that are looking for more content, for example, to buy up these types of assets.

That could mean, for example, that viewers of the Golf Channel find its content on what were once rival platforms. But the spun-off assets could also gain more power to focus on priorities specific to them, under the umbrella of a smaller company, Gutman added. That would potentially open the door for networks like CNBC to further monetize their own content or expand their brand.

“I think this will provide opportunities,” he said, adding that customers will also have more options to create subscriptions based on what interests them most.

Verna is less optimistic. He pointed to a history of change in the media landscape that has repeatedly been tough on consumers.

People already have a hard time figuring out where to watch or stream something they’re looking for, Verna said, and deals to license or further distribute that could make that worse. And paying for more and more services is increasing, especially as platforms have raised prices over time.

“It’s too early to know what impact (Comcast’s spinoffs) will have… But I wouldn’t hold my breath (on there being a net benefit to consumers),” Verna said. “Consumers are the ones who should be driving these trends, and to some extent they are. But they also have a tendency to get the short end of the stick every time.”

The spinoff should be completed in about a year, the entertainment giant said Wednesday, pending funding and approval from the government’s board and regulators.

Following Lazarus’ appointment as CEO of the new company, Anand Kini, NBCUniversal’s current Chief Financial Officer, will assume the same title at the new company, as well as the role of Chief Operating Officer.

Shares of Philadelphia-based Comcast rose 1.6% on Wednesday.

Comcast reported revenue of more than $32 billion and earnings of $1.12 per share in its most recent quarter, boosted by the summer success of “Despicable Me 4,” which grossed more than $1 billion worldwide.

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Grantham-Philips reported from New York.