Cable Network Branches to Separate from Comcast Corporation

In a move that underscores the impact of cord-cutting on the traditional cable business model over the past decade, Comcast has announced the spin-off of its cable network business into a new publicly traded company named "SpinCo". This decision comes as competition from streaming services like Amazon's Prime Video and Netflix, which are now broadcasting live NFL games, gradually erodes the traditional cable market.

Comcast's Chairman and CEO, Brian Roberts, stated that SpinCo will be "ideally positioned for future growth". The new company will reach approximately 70 million U.S. households, making it a significant player in the media landscape.

However, Comcast's NBCUniversal division will retain some of its most valuable assets, including Bravo, the NBC broadcast network, Telemundo, the Peacock streaming service, NBC Sports, and the Universal theme parks. The decision to retain these properties reflects the notion that there's still value in broadcast properties, especially live sports.

The networks that will comprise SpinCo generated about $7 billion in revenue for the fiscal year that ended on Sept. 30. Despite this, Comcast's video subscriber base has declined by about 9 million over the same period. This decline is a testament to the growing popularity of streaming services.

The spinoff is expected to be completed within a year and will have significant scale as a pure-play set of assets anchored by leading news, sports, and entertainment content. The new company will house NBCUniversal's cable television networks such as USA Network, CNBC, MSNBC, Oxygen, E!, Syfy, Golf Channel, Fandango, Rotten Tomatoes, GolfNow, and Sports Engine.

The entirety of NBCUniversal, post-spinoff, will be on a new growth trajectory, fueled by its world-class content, technology, IP, properties, and talent. This move was hinted at last month when the company said it was looking at such an arrangement. On its Oct. 31 third-quarter earnings call, Comcast President Mike Cavanagh said the company was looking for "the best path forward" for its cable assets.

The planned spinoff will strategically position NBCUniversal with its leading broadcast and streaming media properties. The move is one of the most explicit examples of how traditional media companies are adapting to the changing landscape, with traditional media companies themselves also scheduling exclusive NFL games for their streaming services, further challenging the traditional cable business model.

The spinoff will have the same dual-class share structure as Comcast, ensuring that the company maintains control over its strategic direction. Since 2013, both satellite and cable providers have collectively lost 30 million TV subscribers, underscoring the need for such a move.

In conclusion, Comcast's spin-off of its cable network business into SpinCo marks a significant shift in the media industry. The move indicates a recognition of the growing importance of streaming services and a strategic response to the challenges posed by this shift. As the media landscape continues to evolve, it will be interesting to see how other traditional media companies adapt.