Comcast plans split of media assets from broadband business
Comcast said it will spin off NBCUniversal and Sky, separating its media holdings from its US broadband and wireless networks.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Comcast said it plans to separate NBCUniversal and Sky from its broadband and wireless networks, a move that would redraw one of the largest US media and connectivity groups. The company said the break-up is expected to be completed within a year through a tax-free spin-off.
Under the plan, existing Comcast shareholders would receive stock in both Comcast and the new standalone media company, according to Comcast. The Financial Times reported that Comcast shares rose more than 20 percent in pre-market trading after the announcement on Monday.
The planned split comes as traditional media companies face pressure from streaming services and social media platforms, according to the Financial Times. The report said Paramount Skydance is expected to complete a $111 billion acquisition of Warner Bros Discovery later this summer, combining two major Hollywood studio owners.
Comcast’s share price had fallen about 30 percent over the previous year before the announcement, the Financial Times reported. The decline pushed the company’s market value toward a 10-year low of $82.7 billion, while Comcast’s internet business has faced new competition from rivals including Elon Musk’s SpaceX, according to the report.
What each company would hold
The new media company would include Universal Studios, Peacock and Sky’s operations outside the United States, according to Comcast. NBCUniversal also owns NBC, Telemundo, DreamWorks, theme parks and resorts.
Comcast would retain the broadband and wireless network business, which reaches 65 million customers across the United States, according to the company. Comcast said it plans to set up both companies with strong investment-grade balance sheets and financial flexibility to pursue their own growth plans.
The Financial Times reported that people close to the move said the split is meant to make the business easier for investors to assess. Some investors prefer Comcast’s more stable broadband operations, while others want a separate media company, those people told the Financial Times.
The separation could also make partnerships and acquisitions easier for each company, a person close to the move told the Financial Times. Comcast was among the bidders for Warner Bros Discovery last year before Paramount Skydance won that contest, according to the report.
Leadership changes and possible UK deal
Comcast said chair and chief executive Brian Roberts will remain actively involved in leading both companies after the split. Mike Cavanagh, Comcast’s co-chief executive, will become chief executive of NBCUniversal, while former Comcast finance chief Michael Angelakis will lead Comcast, the company said.
Comcast expects to keep a stake of up to 19.9 percent in NBCUniversal for as long as one year after the spin-off is completed, according to the Financial Times. The company intends to sell that holding over time in a tax-efficient way, the report said.
The Financial Times also reported that Comcast is expected to announce a deal in the coming weeks to buy ITV’s broadcasting business for about £1.6 billion, citing multiple people familiar with the situation. That deal would strengthen Comcast’s UK media operations before the split, according to the report.
The latest plan follows Comcast’s January spin-off of its cable television channels into a separate company called Versant, according to the Financial Times. That earlier separation included networks such as CNBC and USA Network.
This story draws on original reporting from Ars Technica.