Comcast Spins Off Major Cable Networks As Pressures From Streaming Services Impact Traditional Cable Providers

Today Comcast (CMCSA) announced plans to spin off the majority of its cable television networks into a new publicly traded company. The spin-off, temporarily named “SpinCo,” will include popular channels like USA Network, CNBC, MSNBC, Oxygen, E!, SYFY, and Golf Channel. However, Comcast will retain key NBCUniversal assets, including NBC’s broadcast network, NBC News, NBC Sports, the streaming platform Peacock, and the cable channel Bravo. Mark Lazarus, chairman of NBCUniversal’s media group, will lead SpinCo as its CEO, with Anand Kini serving as CFO and COO.

The tax-free structured spin off transition to shareholders, is expected to take about a year to complete, according to Comcast President Mike Cavanagh. He emphasized that SpinCo will be well-capitalized, with strong cash flow, a solid balance sheet, and the financial flexibility to pursue growth through organic initiatives or acquisitions.

This decision comes as a response to Comcast’s shifts in the media industry. Hurdles have been faced by traditional cable providers from cord-cutting and the rise of streaming services. Traditional cable TV has faced declining subscriptions, even as some channels remain profitable. Comcast’s streaming service, Peacock, continues to grow, adding 3M subscribers in the last fiscal quarter, despite losing 365K cable customers in the same period.

Management believes the well-capitalized, independent company will hold the potential to lead the changing landscape for cable networks and feels confident in the strength of SpinCo’s portfolio and leadership team.

Comcast’s stock price rose in premarket trading after the announcement and shares remain slightly in the green. Dan Ives, a technology sector analyst at Wedbush Securities, called the spin-off a “smart strategic move,” citing the potential for new monetization strategies in the evolving cable and streaming markets.