Comcast has formally unveiled plans to spin out most of its linear cable networks (except Bravo) to shareholders into a separate company, a move that President Mike Cavanagh said today puts all of NBCUniversal “on a new growth trajectory.”
Along with the spin, Comcast CEO Brian Roberts, in a note to staffers obtained by Deadline, announced a re-organized leadership team for NBCUniversal including expanded roles for Donna Langley as well as Matt Strauss and Adam Miller.
Deadline reported many of the spin details Tuesday, including leadership of the new entity (initially called SpinCo) by NBCUniversal Media Group’s Mark Lazarus and CFO Anand Kini, who will lead the development of an independent strategy, while also establishing SpinCo as a potential partner and acquirer of other complementary media businesses, said Comcast, which will start a CFO search to replace Kini at NBCUniversal Media Group.
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“As a standalone company with these outstanding assets, we will be better positioned to serve our audiences and drive 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’m excited about the growth opportunities this transition will unlock. Our financial strength will also provide capacity for an attractive capital return policy while allowing for investment in the growth of these businesses.”
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Roberts said Langley, in her expanded role, will lead greenlight decisions across the NBCU enterprise and have full oversight of all entertainment programming and marketing across Peacock, Bravo, and NBC — including primetime and late night — and will continue to oversee the global creative strategy, business operations, production, acquisitions, marketing, and distribution for the Film and Television Studios.
Matt Strauss will become chairman of the NBCUniversal Media Group. He will continue to lead Direct-To-Consumer, including Peacock, International Networks, and Global Streaming, while also taking on responsibility for NBC Sports, Advertising Sales, Content Distribution, Decision Sciences & Research, and NBC Broadcast Affiliate Relations.
Adam Miller will become chief operating officer for NBCUniversal, “reflecting the leadership he provides across all aspects of the company,” the memo said. Roberts named Miller, along with CFO Kini, to manage the transition in addition to their regular responsibilities, starting immediately through completion.
Cesar Conde will continue in his role as chairman, NBCUniversal News Group, where he will oversee NBC News and NBC News Now, Telemundo Enterprises, and NBCU Local stations, and working closely with Roberts on other growth opportunities for NBCUniversal.
Mark Woodbury will continue in his role as chairman and CEO of Universal Destinations & Experiences where he oversees all aspects of its four destinations worldwide — Universal Orlando Resort, Universal Studios Hollywood, Universal Studios Japan, and Universal Beijing Resort — a global consumer products and gaming business as well as the development of a location-based entertainment business.
Adapting To A New Media Landscape
Comcast teased a possible split in late October with Cavanagh calling it “the best path forward for these assets” as the media business transitions from linear to streaming. Cable assets to be carved off include cable channels MSNBC, CNBC, E!, Syfy, Golf Channel, Oxygen and USA, along with digital assets like Fandango, Rotten Tomatoes, GolfNow and Sports Engine. They will be run as per above by some of NBCU’s most respected executives.
Bravo, as well as NBC and streamer Peacock, will remain inside Comcast alongside Telemundo and the company’s powerful broadband business, theme parks and experiences, and film and TV studios.
The media giant sees a split as the the best way to give it some optionality in a shifting landscape and marks one of most dramatic moves by a major entertainment company in some time — short of a merger like Paramount’s sale to Skydance.
The decision comes as streaming has upended entertainment, eroding the reach of linear television. Paramount Global and Warner Bros. Discovery took massive, multi-billion dollar hits this summer to write down the value of their cable assets. Balancing a business that’s declining but still throws off lots of cash with new streaming imperative has been the top consideration for media companies and a very knotty one.
Now announced, the spin-off is a complicated process that should be complete by the end of 2025. Customary closing conditions include final approval from the Comcast board, satisfactory completion of SpinCo financing, receipt of tax opinions, and any regulatory approvals.
“When you look at our assets, talented management team and balance sheet strength, we are able to set these businesses up for future growth,” Roberts said. “With significant financial resources from day one, SpinCo will be ideally positioned for success and highly attractive to investors, content creators, distributors and potential partners.”
Over the last twelve months ended September 30, Comcast said SpinCo assets generated approximately $7 billion in revenue.
SpinCo will have the same dual-class share structure as Comcast.
Comcast, among the best situated financially among its media peers, said the spin is expected to be accretive to revenue growth at Comcast and approximately neutral to Comcast’s leverage position. It doesn’t anticipate any change to its credit profile or ratings as a result.
Opportunities it ticked off for the new SpinCo include: a dedicated management team with deep sector expertise that can tailor decisions and allocate capital based on the needs of the business; a well capitalized balance sheet with strong credit metrics; capacity for an attractive capital return policy to drive shareholder value; increased operational focus; and a dedicated board of directors.
Namely, if SpinCo wants to beef up by acquiring more cable networks it can without upsetting Comcast investors.
While SpinCo will operate as an independent business, it will enter into a transition services agreement with NBCUniversal “to allow SpinCo to operate seamlessly from day one.”
Roberts said Comcast’s effort to launch SpinCo as a successful public company “will be done well versus done quickly.”
He will not sit on the board of the new company but will own about the same circa 30% economic interest in SpinCo as he does in Comcast.
“We have begun standing up a process and dedicated resources to ensure that we identify all that needs to be done and that it is done carefully and thoughtfully, without impacting the critical work everyone is doing to drive our priorities and businesses forward,” he said.