Comcast Considers Spin-Off of Cable Networks

By Harshita Mary Varghese

(Reuters) – Comcast is considering spinning off its cable networks, including CNBC and MSNBC, into a separate company as traditional TV viewership declines due to cord-cutting. This spin-off would not include the NBC broadcast network or the Peacock streaming service. Comcast is looking for a partner to grow Peacock, according to president Mike Cavanagh.

"We chose not to participate in the M&A process around Paramount earlier this year, but we would consider partnerships in streaming," Cavanagh remarked.

Shares of Comcast rose nearly 3% in early trading after reporting better-than-expected third-quarter revenues due to box office hits and an Olympics-driven surge in ad sales. Despite the decline in cable TV profitability, media companies are exploring options for their legacy businesses amid struggles with streaming service losses.

Earlier in the year, Paramount Global, which owns Comedy Central and Nickelodeon, merged with Skydance Media, highlighting industry shifts.

Cavanagh stated, "We are now exploring whether creating a new well-capitalized company owned by our shareholders and comprised of our strong portfolio of cable networks would position them to take advantage of opportunities in the changing media landscape."

Strong Third Quarter Results

Following robust third-quarter performance, Comcast's media business enjoyed a $1.9 billion revenue increase from the Paris Games, its highest-ever for the Olympics, largely driven by increased advertising.

The studio division also reported significant success with hits like "Despicable Me 4" and "Twisters." Despite a 5.3% revenue decline in theme parks due to shifts in customer spending, Comcast lost 87,000 broadband customers but exceeded expectations, losing fewer than the projected 143,200.

This was mainly attributed to the end of the federal Affordable Connectivity Program (ACP), which had subsidized internet access. Nevertheless, excluding the ACP's impact, Comcast saw net additions of 9,000 broadband customers.

Analyst Craig Moffett noted, "The headlines will focus on the potential spin-off of their legacy cable networks, something Comcast investors have long hoped for. But the bigger story may be their strong performance in broadband net additions."

Comcast's overall revenue reached $32.07 billion, surpassing estimates of $31.66 billion, with media revenue increasing by 36.5%. Peacock added 3 million paid subscribers, totaling 36 million, but the company lost 365,000 video subscribers, compared to expected losses of 420,300, as customers continue moving to streaming services.