Cable television has long been viewed as a stagnant business, showing little promise for growth over the years. However, Comcast believes it has found a new growth opportunity.
On Wednesday, the company announced that it’s spinning off NBCUniversal’s cable television networks — such as CNBC, E!, Golf Channel, MSNBC, Oxygen, SYFY, and USA Network — into a separate publicly traded company. It’s also including digital assets like GolfNow, Fandango, Rotten Tomatoes, and Sports Engine.
This bold spin-off strategy could set a precedent for how other media companies treat their cable channels.
It may look like this spinoff is a way for Comcast to get rid of assets that are diminishing in value in the streaming era. However, Comcast says that the new independent company — which it calls SpinCo for now — will have “significant scale” and is well-positioned for success due to its portfolio of leading news, sports, and entertainment content.
Other benefits the company anticipates are a good capital return policy to increase shareholder value and more “financial flexibility to pursue growth opportunities,” the company explains. Comcast claims that, in the 12 months ending September 30, SpinCo generated around $7 billion in revenue.
“This transaction positions both SpinCo and NBCUniversal to play offense in a changing media landscape,” Comcast president Mike Cavanagh said in a statement. “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.”
Mark Lazarus, chairman of NBCUniversal Media Group, will serve as chief executive officer of SpinCo.
The spin-off is expected to be completed within one year.