Comcast has announced plans to spin off its NBCUniversal cable television arm as part of a strategy to adapt to the challenges posed by streaming services like Netflix and Amazon Prime. The move, which was confirmed on Wednesday, aims to create a new company encompassing cable networks such as MSNBC, CNBC, USA, E!, Syfy, and the Golf Channel.
While the networks remain profitable, generating a combined revenue of $7 billion (£5.5 billion) in the year ending in September, the shift reflects the changing landscape of the media industry. Comcast will retain control of the NBC broadcast network, its film and television studios, its theme parks, and its Peacock streaming service. The company anticipates completing the spin-off within a year.
Executives believe that by separating the cable networks, Comcast will be in a better position for growth, particularly as traditional cable TV continues to see a decline in viewership. They also indicated that the newly formed company will be well-positioned to acquire additional cable networks that may become available in the future.
The new company will be led by Mark Lazarus, the chairman of NBCUniversal’s media group, who will serve as its CEO. Lazarus expressed optimism about the future, stating, “We see a real opportunity to invest and build additional scale, and I’m excited about the growth opportunities this transition will unlock.”
Comcast’s president, Michael Cavanagh, hinted at the potential move during a call with investors last month, suggesting the creation of a new, well-capitalized company that would manage its portfolio of cable networks.
Comcast acquired NBCUniversal in 2011, before the rise of streaming giants disrupted the cable TV market. At the time, its cable networks were seen as highly valuable assets. However, the decline of traditional cable subscriptions and the shift toward streaming platforms have led to reduced audience numbers for Comcast’s cable networks, which currently reach approximately 70 million U.S. households.
The decision follows similar moves by other media giants. Earlier this year, Warner Bros. and Paramount Global cut billions of dollars from the valuation of their cable TV networks. Comcast is the first major media company to officially announce the separation of its cable business, although Walt Disney had previously considered a similar strategy before abandoning the plan.
Following the announcement, shares in Comcast were set to open about 2% higher in New York trading.
