NBC-parent Comcast is exploring spinning of its struggling cable networks business, including left-leaning MSNBC, President Mike Cavanagh said Thursday.
Cavanagh revealed during the third-quarters earnings call that the media giant is mulling the creation of a “new, well-capitalized company owned by our shareholders and comprised of our our strong portfolio of cable networks.”
The cable networks include MSNBC, CNBC, Bravo, E!, Syfy, USA Network and Oxygen True Crime.
The possible separation would not include broadcast network NBC or streaming service Peackock, Cavanaugh said.
“We chose not to participate in the M&A process around Paramount in the earlier part of this year. But we would consider partnerships in streaming,” he added.
Shares of Comcast rose over 3% in midday trading Thursday as the company also reported better-than-expected revenue for the third quarter on the back of box office hits and an Olympics-driven surge in advertising sales.
The exec’s comments come as cable customers continue to cut their traditional TV bundles in favor of streaming.
In recent years, Comcast has focused on building its streaming service Peacock, which got a jolt during the third quarter when it exclusively aired the Summer Olympics in Paris.
Earlier this year, Paramount Global — which owns cable TV networks Comedy Central, Nickelodeon and MTV — agreed to merge with Hollywood production company Skydance Media in a deal that signaled a changing of guard in the industry.
“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,” Cavanagh said.
During the quarter, Comcast’s media business saw a $1.9 billion revenue boost from the Paris Games — its highest-ever for the Olympics — due mainly to a rise in advertising by brands.
Meanwhile, Peacock added 3 million paid subscribers in the quarter, bringing the total to 36 million.
Comcast’s total revenue was $32.07 billion, above estimates of $31.66 billion.
Still, Comcast also lost 365,000 cable TV subscribers, compared with expectations for 420,300, according to FactSet, as consumers moved away from traditional TV to streaming services.
In August, Warner Bros. Discovery booked a whopping $9.1 billion write-down of its TV networks, triggered by the reevaluation of the book value of the segment.
Analyst firm MoffettNathanson estimated there were 4 million traditional pay TV subscriber losses in the first six months of the year, calling it “a mindboggling total.”
That includes 2.4 million losses in the first quarter, considered the worst-ever quarter for defections from the bundle.
“Like many of our peers in media, we are experiencing the effects of the transition in our video businesses and have been studying the best path forward for these assets,” Cavanagh said. “We are not ready to talk about any specifics yet, but we’ll be back to you as and when we reach firm conclusions.”
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