Comcast Is Thinking About Spinning Off Cable Channels to Focus on Streaming
Comcast Is Thinking About Spinning Off Cable Channels to Focus on Streaming
Comcast president Mike Cavanaugh floated the possibility during the company’s third-quarter earnings call with analysts.
Quarterly earnings reports often make for somewhat dry reading, but they’re still must-haves for analysts because many times company executives use them to make big announcements. Comcast president Mike Cavanaugh did just that on Thursday, using his company’s conference call to discuss its third-quarter earnings as a platform to announce that it was considering spinning off popular cable channels like Bravo, CNBC, MSNBC, and USA Network into their own business, a move that could help Comcast focus more on scaling its streaming service Peacock.
Key Details:
- Cavanaugh said more specifics about the plan would be available once Comcast reached “firm conclusions.
- The executive also said Comcast was still on the lookout for potential streaming joint ventures or other partnerships.
- Other media firms like WBD have been urged to separate their cable and streaming businesses by analysts.
Cavanaugh made sure to keep it clear that Comcast has not made a final decision on the future of its cable channels, and it’s still possible that no major structural changes will be made. But it seems unlikely that he would have mentioned it at all unless it was a serious possibility.
“Like many of our peers in media, we’re experiencing the effects of the transition of our video businesses and have been studying the best path forward for these assets,” Cavanagh said. “To that end, we are now exploring whether creating a new, well-capitalized company owned by our shareholders and comprised of our strong portfolio of cable networks would position them to take advantage of opportunities in the media landscape and create value for our shareholders. We are not ready to talk about any specifics yet, but we’ll be back to you as and when we reach firm conclusions.”
Spinning off his company’s cable networks into a separate entity could allow Comcast to worry more about trying to build the parts of the company it sees as its future: its broadband business and its streaming service Peacock. Cavanaugh said that the company didn’t get into the Paramount pursuit, but would still be on the hunt for streaming team-ups that made sense.
“We would consider partnerships in streaming despite their complexities,” he told analysts.
Peacock was announced as carrying 36 million subscribers as part of the earnings report, and though it’s still losing money, its revenue generated per quarter continues to climb. As of now, Peacock is available in just one bundle: the StreamSaver combo with Netflix and Apple TV+ that’s available to Xfinity TV and internet customers.
The idea of spinning off Comcast’s cable channels sounds a lot like what Bank of America analyst Jessica Reif Erlich recommended Warner Bros. Discovery do over the summer, only in reverse. She proposed that WBD should spin Max off into a separate entity, which would allow the company’s cable channels to carry its debt load while Max builds scale. Since Comcast doesn’t carry the same level of long-term debt as WBD, a spinoff of its cable channels makes more sense than one of its streaming business.
The continued, accelerating pace of cord-cutting has left most legacy media companies trying to decide what to do with cable channels that aren’t worth anywhere near what they used to be. Comcast may make a bold step toward separating its cable business from the rest of its operations in the near future if it carries out its plan to spin off its cable networks.
Peacock
Peacock is a subscription video streaming service from NBCUniversal that includes original shows, blockbuster movies, and classic television series. Peacock is home to “Yellowstone,” “The Office,” and original hits like “Poker Face” and “Bel-Air.” You can also watch live sports and NBC programming, including the NFL, MLB, WWE, the Olympics, the Premier League, NASCAR, the French Open, college football and basketball, and the PGA Tour. Premium Plus subscribers can stream their local NBC feed in all 210 markets.