Comcast to Spin Off NBCUniversal’s Cable Networks in Strategic Move Amid Streaming Growth

Comcast, the US media giant, is set to announce plans to spin off its NBCUniversal cable television arm, marking a significant shift as the company responds to the growing dominance of streaming platforms.

The spinoff, expected to be finalized within the next year, will create a new company that will include cable networks such as MSNBC, CNBC, USA, E!, Syfy, and the Golf Channel.

This decision comes as Comcast faces the ongoing trend of “cord-cutting,” where viewers are increasingly abandoning traditional cable subscriptions in favor of streaming services like Netflix and Amazon Prime. Despite this, the cable networks remain profitable, generating a combined revenue of $7 billion in the year ending September. The new company, which will be run by Mark Lazarus, chairman of NBCUniversal’s media group, aims to better position itself for future growth by concentrating on the cable TV market, while Comcast retains its broadcast network, Universal Studios, theme parks, and its streaming service, Peacock.

Comcast’s leadership believes the spinoff will create a more agile and focused organization. By separating its traditional cable assets, the company hopes to drive growth in its other entertainment businesses, which include major sports rights, movie studios, and its rapidly expanding streaming service. Comcast’s president, Mike Cavanagh, hinted at this strategic shift during a call with investors in late October, suggesting that the company was exploring ways to leverage its balance sheet and asset portfolio more effectively in a changing media landscape.

While the cable networks being spun off still hold significant value, the move highlights the growing challenges faced by traditional television channels. The industry has witnessed substantial declines in the valuation of cable TV businesses, with companies like Warner Bros. and Paramount Global writing down billions from their cable network valuations. Media analysts, such as Rich Greenfield of LightShed, have referred to cable channels as a “drag” on media companies’ growth in the era of digital transformation.

The new company created from the spinoff will likely be well-capitalized, with plans to explore future acquisitions of other cable networks or digital assets that may become available. Analysts expect that the separation will enable the remaining NBCUniversal assets to focus on high-growth areas without the constraints of the cable business. The restructuring is seen as a proactive approach to navigating the evolving media industry, where digital streaming services continue to gain market share.

In terms of leadership, the new company will be guided by Mark Lazarus, who will continue to oversee the cable networks. Meanwhile, Comcast’s entertainment group will be led by Dame Donna Langley, who will focus on the Universal studios and streaming operations. Matt Strauss, who currently heads Peacock, will take charge of distribution and programming agreements for the new entity.

BBC and the Financial Times contributed to this report.