Why Did Comcast Spin Off Its Cable Channels?
By Movieguide® Contributor
As linear TV continues to be a losing game, Comcast announced it will split NBCUniversal into two distinct companies, one comprised of its cable networks and the other made up of its other properties.
While Comcast hopes both companies will find success, the split has clearly given one a stronger outlook than the other. NBC Sports, Bravo, Peacock, Universal film operations and theme parks will fall into one silo, while USA, MSNBC, CNBN, E!, Oxygen, Golf Channel, Fandango and Rotten Tomatoes, among other cable networks, will fall into the other silo.
“A seismic change like the division of NBCU’s linear assets is expected to lead to restructuring and likely staff cuts within NBCUniversal’s entertainment operation when the dust settles on the new company, slated to be up and running in a year,” Deadline said.
“The spin-off looks little like others of its kind. The new Comcast company won’t be loaded down with debt like rival Warner Bros. Discovery,” Comcast executives told Variety. “Its managers are veterans, including new CEO Mark Lazarus, who has held senior operating TV roles for years. And Comcast expects the new entity to be an acquirer of assets.”
While it’s clear that the split is mainly meant to shield the upswinging properties from those facing a decline, it also gives the cable ventures more opportunities to partner with other networks.
“The new Comcast spin-off might be able to pick up storied brand names at lower costs, adding to the leverage its networks could have in the marketplace,” the executives explained.
The cable venture, however, will face even more difficulties as it will struggle to land favorable ad deals. NBCUniversal has previously sold its ads as a package for the whole company, meaning the streaming platforms boosted the cable networks. Now, however, that safety net will be gone, and linear TV will have to stand on its own legs.
“The concept raises major sticking points, such as whether two different teams of Comcast-backed ad reps will be calling on major agencies to sell different sports and entertainment programming,” the executives said. “With less authority to cobble together the bigger packages many advertisers crave in a world where they need to show up more frequently to get their messages out to potential customers.”
This split will place the cable networks in a tricky position, but it may be the only way to ensure NBCUniversal’s more profitable business does not get bogged down by the decline of linear TV.
READ MORE: WARNER BROS. DISCOVERY NEEDS TO SWITCH GEARS
Comcast announced it was considering spinning off its cable networks last month.
“President Mike Cavanagh said at the time that the company was exploring creating ‘a new, well-capitalized company owned by our shareholders and comprised of our strong portfolio of cable networks.’ He added that NBCUniversal’s broadcast network NBC and the streaming service Peacock would remain with Comcast,” NBC News reported.
- Content: +2Share:
- Content: +3