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 and 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. These networks collectively generated approximately $7 billion in revenue for the 12 months ended September 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 enable both SpinCo and NBCUniversal to play offense in a complex and evolving media landscape,” Comcast President Mike Cavanagh said in an internal memo to employees on Wednesday.
Comcast shares fell slightly in early trading Wednesday after rising more than 3% pre-market.
The company said it aims to complete the spinoff within a year. Goldman Sachs and Morgan Stanley are advising the company on the transaction.
“Our efforts to launch SpinCo as a successful public company will be done well or quickly,” Cavanagh wrote.
Comcast said NBCUniversal will continue to generate approximately $40 billion in annual revenue from content and experiences after the spinoff.
The change will cause a shake-up in Comcast’s leadership. NBCUniversal Media Group Chairman Mark Lazarus will assume the role of CEO of SpinCo. Anand Kini, NBCUniversal’s Chief Financial Officer, will now serve as CFO of SpinCo. Meanwhile, Matt Strauss, the head of Comcast’s direct-to-consumer business, will take over as chairman of NBCUniversal Media Group, and Chief Content Officer Donna Langley will take on 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 increase shareholder returns in this incredibly dynamic media environment across news, sports and entertainment,” said Lazarus. “We see a real opportunity to invest and build additional scale and I am excited about the growth opportunities this transition will provide.”
“Our financial strength will also provide scope for an attractive capital return policy while enabling investments in the growth of these companies.”
Comcast said in late October that it had begun exploring combining its cable TV networks into a separate company, sending its shares up more than 3% the same day, Yahoo Finance’s Alexandra Canal reported at the time.
