TV networks MSNBC and CNBC to be spun off by Comcast

Comcast, the US-based media giant, is preparing to spin off its NBCUniversal cable television division in response to the growing impact of streaming services like Netflix and Amazon Prime. This major move, expected to be announced on Wednesday, will result in the creation of a new company that includes prominent cable channels such as MSNBC, CNBC, USA, E!, Syfy, and the Golf Channel.

Despite the rise of streaming platforms, these networks remain profitable. In the year ending in September, they generated a combined revenue of $7 billion (£5.5 billion), showing that cable TV still has a strong revenue stream. However, Comcast plans to retain its NBC broadcast network, its film and television studios, theme parks, and the Peacock streaming service.

Comcast’s leadership believes this spinoff, which is expected to be completed in about a year, will better position the company for future growth. The new company will be helmed by Mark Lazarus, the chairman of NBCUniversal’s media group. Executives are optimistic that the spinoff will allow them to expand by acquiring other cable networks that may come up for sale in the future.

The decision follows a broader trend within the media industry, where traditional cable TV networks are struggling to adapt to the rapid growth of streaming. Comcast’s president, Michael Cavanagh, had hinted at the plan during a call with investors last month. He mentioned exploring a strategy that would create “a new well-capitalized company” focused on cable networks, which would be owned by Comcast shareholders.

Comcast’s decision marks a significant shift. The company acquired NBCUniversal in 2011, at a time when its cable networks were considered highly valuable assets. However, the landscape has since changed dramatically. Over the past few years, more and more viewers have been canceling their cable subscriptions in favor of streaming services. This shift has been a challenge for traditional cable networks, which are seeing their subscriber bases dwindle.

Comcast’s move comes as part of a wider industry trend. Earlier this year, major media companies like Warner Bros. and Paramount Global were forced to drastically reduce the valuation of their cable TV networks as part of restructuring efforts. Similarly, Walt Disney had considered spinning off its cable networks but ultimately abandoned the idea.

By spinning off its cable networks, Comcast is positioning itself as the first major media company to take such a step. The goal is to separate its traditional cable business from its other assets, particularly its streaming service, Peacock, and its broadcast television network. Comcast executives believe that by doing so, the company will be more agile and better equipped to navigate the changing media landscape.

Despite the challenges facing cable TV, the networks Comcast is spinning off still generate significant revenue. The new company will likely focus on maintaining and growing these assets, while Comcast itself can focus on expanding its streaming services and other entertainment ventures. The spinoff is seen as a move to align Comcast’s portfolio with current industry trends, where streaming and digital content are increasingly driving the market.

In conclusion, Comcast’s decision to spin off its NBCUniversal cable networks marks a significant shift in how traditional media companies are adapting to the rise of streaming platforms. While these networks remain profitable, Comcast believes that by separating them from its other business ventures, it will be better positioned to capitalize on future growth opportunities. This move sets a precedent for other major media companies that are grappling with the changing media landscape and the growing dominance of digital streaming.