Comcast, a media and broadband conglomerate, suggested the idea of splitting off its basic-cable channels into a separate company during an earnings call with investors on Thursday morning. The move comes as the pay-TV industry continues to decline, with millions of subscribers dropping out each year, particularly impacting basic-cable TV networks. The proposal is reminiscent of a similar plan floated by Warner Bros. Discovery earlier this summer.
Despite the potential split, Comcast would still retain ownership of major assets such as the NBC broadcast channel, the Peacock streaming service, and the Universal film and TV studio. The goal behind dividing the cable channels from the main company is to create value by separating a declining asset from the rest of the business.
While Comcast's president, Mike Cavanagh, presented the idea as a strategic move to adapt to changes in the media landscape and create shareholder value, there are several complexities and uncertainties surrounding the proposal. The cable networks are intertwined with other businesses that Comcast intends to keep, such as the Peacock streaming service, which relies on programming from these channels.
Additionally, questions remain about the viability of a separate company solely focused on the cable networks, as well as the potential impact on Comcast's advertising sales and negotiations with other pay-TV distributors. The reaction from Wall Street to the announcement was initially positive, with Comcast shares rising over 6%, but the long-term feasibility of the plan remains to be seen.
In a separate development, Comcast also expressed interest in merging its Peacock streaming service with other streaming assets, although CEO Brian Roberts acknowledged the challenges of making such deals work in practice. Overall, the future of cable TV networks and their integration within larger media companies like Comcast is uncertain in the face of evolving consumer preferences and industry trends.