Comcast (CMCSA) confirmed plans to spin off most of its cable networks into a new, publicly traded company as it and others in the industry grapple with more consumers cutting the cord.
The yet-to-be-named SpinCo will house most of NBCUniversal’s cable television networks, including USA Network, CNBC, MSNBC, Oxygen, E!, SYFY, and Golf Channel. Those networks collectively generated approximately $7 billion in revenue over the 12 months ended Sept. 30, Comcast said in its announcement.
Comcast’s Peacock streaming service, NBC News, the NBC broadcast network, and the Bravo channel will remain under the parent company.
“We are uniquely positioned to set both SpinCo and NBCUniversal up to play offense in a complex and evolving media landscape,” Comcast president Mike Cavanagh said in an internal memo to employees Wednesday.
Comcast stock was down slightly in early trading on Wednesday after popping more than 3% premarket.
The company said it is looking to complete the spin-off in one year. Goldman Sachs and Morgan Stanley are advising the company on the transaction.
“Our effort to launch SpinCo as a successful public company will be done well versus done quickly,” Cavanagh wrote.
Comcast said that after the spin-off, NBCUniversal will continue to receive about $40 billion in annual content and experiences revenue.
The change will create a shakeup in Comcast’s corporate leadership. NBCUniversal Media Group chairman Mark Lazarus will assume the role of CEO of SpinCo. Anand Kini, the CFO of NBCUniversal, will now serve as SpinCo’s CFO. Meanwhile, Matt Strauss, the head of Comcast’s direct-to-consumer business, will take over as chair of NBCUniversal Media Group, and chief content officer Donna Langley will assume the role of chairman of NBCUniversal Entertainment and Studios.
“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,” Lazarus said. “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.”
Comcast said in late October that it had begun to explore spinning off its cable TV networks into a separate business, sending the stock up more than 3% the same day, Yahoo Finance’s Alexandra Canal reported at the time.
