NBC Universal spinning off cable networks into new company
Cable networks such as USA Network and E! under new ownership by 2026
With the business in freefall, Comcast Corp. has decided to part ways with its cable networks.
As hinted a few weeks ago, Comcast announced Wednesday it is spinning off its cable networks from its NBCUniversal into a new company. Tentatively titled SpinCo (we hope it’s a temporary name), it is the new home of CNBC, MSNBC, Oxygen, USA Network, SyFy, E!, Golf Channel, and web portals Fandango, Golf Now, and Rotten Tomatoes.
“As a standalone company with these outstanding assets, we will be better positioned to serve our audiences and drive shareholder returns in this incredibly dynamic media environment across news, sports, and entertainment,” said NBCU Chairman Mark Lazarus, who is leaving the position to become CEO of the new company. “We see a real opportunity to invest and build additional scale and I’m excited about the growth opportunities this transition will unlock. Our financial strength will also provide capacity for an attractive capital return policy while allowing for investment in the growth of these businesses.”
Anand Kini was named CFO of “SpinCo” and operating chief.
Replacing Lazarus is Donna Langley, who becomes Chairwoman of NBCUniversal Entertainment Studios as the company retains NBC and its owned stations such as Chicago’s WMAQ-TV; Spanish-language Telemundo and its owned stations including WSNS-TV; digital subchannels Cozi and Nosey; streamer Peacock; its regional sports networks in Philadelphia, the Bay Area, and New England; and a Bravo, which is one of the highest-rated cable networks due to the success of the Real Housewives franchise and is one of the most-watched non-sports shows on Peacock.
The combined entities earned $7 billion in revenue in twelve months ending September 30. The spinoff process is expected to take a year.
The separation of the cable networks from Comcast and NBCUniversal comes as subscribers are cord-cutting. While NBCU keeping Bravo is understandable, given The Real Housewives has been a financial success due to its female demo dominance, keeping the small number of regional sports networks is a head-scratcher, considering the business is collapsing given its NBC Sports Chicago closed on September 30.
Several questions are left unresolved with the split. It’s unclear if NBC Sports will continue to air their properties on SpinCo’s networks, as NBCU used them for sporting events since NBCSN closed in 2021, including the Olympics. Also left unanswered is whether NBC News would continue to work with CNBC and MSNBC, whose ratings have tumbled since election night when President Donald Trump won re-election, and the future of MSNBC itself has come into question as it, CNBC and The Golf Channel may have to rebrand their networks given they use the NBC Peacock logo prominently in their logos and on-air.
With NBCUniversal and Oxygen soon to be in separate companies, look for the simulcast of Oxygen to end on NBC’s owned-and-operated station and Gray Television’s digital subchannel spaces. Once known for schlock such as Bad Girls Club, Oxygen became a true crime channel in 2017 and was added to each NBC station’s dot-four channel positions.
The new company could also target other companies for acquisition or takeover – or be one themselves. With a new Republican administration coming in, expect more merger and acquisition activity. Despite linear TV’s decline, look for several station groups to be in the hunt to expand their portfolios, including Nexstar, Sinclair, Tegna, and a few others as the cross-promotion opportunities with local stations would be beneficial.
Nexstar already has Newsnation and adding another news channel wouldn’t hurt. If Sinclair decides to buy “SpinCo”, you can expect a huge makeover for CNBC and MSNBC, as the conservative-leaning station group would make them more viable competitors to Fox Business and Fox News. It’s the worst-case scenario MSNBC fans and progressives do not want.
Private equity firms could also take a look at the cable properties.
Splitting media companies have not had a great track record. CBS and Viacom split in 2005 and reunited in 2019 amid a changing media landscape. Fox’s TV and studios were separated from News Corp. in 2012 and renamed 21st Century Fox only for most of the company to be sold to Disney. And after Tribune Co. emerged from bankruptcy in 2013, the two were split into Tribune Media and Tribune Publishing with the former being sold to Nexstar in 2019 and the latter to Alden Global Capital in 2021.