Comcast to Separate MSNBC, CNBC, and Cable Channels into New Entity

November 20, 2024 TruthUSA

A number of cable television assets will anchor a new, publicly traded company called SpinCo.

Comcast Corp. is spinning off a new publicly traded company that will include a portfolio of its NBCUniversal cable television networks, including USA Network, CNBC, and MSNBC.

On Nov. 20, the Philadelphia-based media company announced its plan to establish a new company named “SpinCo,” which will possess USA, CNBC, MSNBC, Oxygen, E!, SYFY, and Golf Channel. The newly formed company will also incorporate complementary digital assets such as Fandango, Rotten Tomatoes, GolfNow, and Sports Engine.

The announcement followed statements from Comcast President Mike Cavanaugh during the third-quarter earnings call of the company. Cavanaugh mentioned that Comcast was considering actions concerning its cable networks.

In the announcement, Comcast disclosed that SpinCo’s news, sports, and entertainment assets were already available to 70 million U.S. households.

While the news caused a drop in Comcast shares, with prices falling from $43.37 per share on Nov. 19 to as low as $42.21 per share on Wednesday morning, they stabilized at around $42.40 per share by midday on Nov. 20.

According to Comcast’s announcement, Mark Lazarus, the current chairman of NBC Universal Media Group, will lead SpinCo as CEO. Anand Kini, the CFO of NBCUniversal and the executive vice president of corporate strategy at Comcast, will serve as SpinCo’s CFO and chief operating officer.

The statement did not specify the timeline for the separation, but it emphasized that SpinCo would have “financial flexibility to pursue growth opportunities.”

Comcast stated that if the SpinCo assets had been a distinct company at the time, they would have generated revenue of approximately $7 billion in 2024.

The media company announced its intention to “continue to invest in its strategic core growth businesses” after the SpinCo assets are divested. Comcast will focus on its residential broadband business, wireless, business services, streaming, studio, and theme park assets. This strategic shift is not anticipated to impact Comcast’s debts or credit rating.

In the most recent earnings report published with the Securities and Exchange Commission on Oct. 31, Comcast indicated a decrease in net income in the first nine months of 2024 compared to the same period in 2023.

During the first nine months of 2023, Comcast reported a net income of $11.954 billion. In the corresponding period of 2024, this figure declined by 6.4 percent to $11.192 billion. The impact of the 2024 Summer Olympics, which were broadcast by Comcast properties in the United States, was included in that quarter.

Comcast does not differentiate its broadcast, cable, and streaming segments in its federal disclosures. Instead, it reports financial performance under the “media” category. According to its third-quarter earnings report, the revenue from the media segment rose by 13.9 percent to $20.9 billion in the first three quarters of 2024 from $18.3 billion in the same period in 2023.

In the same filing, Comcast indicated that it anticipates a decrease in the number of subscribers and audience ratings at its linear television networks due to the competitive environment and changing video consumption patterns.

According to Nielsen data, viewership of the cable news channel MSNBC on Election Day 2024 experienced a significant decline compared to Election Day 2020, with approximately 5.5 million viewers this year, down from 7.3 million in 2020.

The same data revealed that Fox News Channel was the most-watched among 24-hour cable news channels on Election Day, with 9.8 million viewers. CNN ranked last among Fox, MSNBC, and itself, with 4.7 million viewers.

The Associated Press contributed to this report.

Source link