As one of the largest cable TV providers in the country, Comcast has suffered some major cord-cutting over the years: Something like 40 percent of U.S. households have canceled cable TV in the past decade. Now even Comcast, the NBCUniversal parent company, isn’t sure it wants its own cable channels
either.

On Thursday, Comcast President Mike Cavanaugh said he has commissioned a
study to look into spinning off NBCU’s cable channels — including Oxygen, Bravo, MSNBC, CNBC, USA, E!, and Syfy — from its studios, theme parks,
streamer Peacock, and broadcast network NBC.

“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,” Cavanaugh said in prepared remarks during the company’s third quarter earnings call. “To that end, 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 and create value for our shareholders. We are not ready to talk about any specifics yet, but we’ll be back to you as and when we reach firm conclusions.”

Cavanaugh later called it “an opportunity to play some offense.”

Wouldn’t that be a nice change of pace? Cable channel owners have been on the defensive in recent negotiations with cable providers. Charter, currently the only MVPD (Multichannel Video Programming Distributor) larger than Comcast
(if the Dish-DirecTV merger goes through, that company will be the new no. 1) dumped eight Disney cable channels last year.

What Cavanaugh didn’t say is also important here — he did not explicitly
state that Comcast/NBCU would then sell the (theoretical) spun off business. (Of course, he also did not say it wouldn’t.)

Either way, it may be too little too late.

“Unfortunately, spinning off NBCU’s cable networks is challenging at this
stage of their lifecycle, and merging Peacock with a streaming industry peer
is beyond complicated,” the media analysts at LightShed Partners wrote in a Thursday blog post. “We suspect this is much ado about nothing and is simply
a sign of just how structurally challenged linear cable networks (are).”

“When you see a dismal future, with no path to growth, you sound the alarm
and explore strategic alternatives,” they continued.

The analysts at investment bank Macquarie aren’t sold either. Sure it’d potentially be good for Comcast shareholders to “remove this declining
revenue component” that’s “likely weighing” on the stock price, but the analysts “question how valuable cable networks would be standalone, without ties to NBCU’s studio and streaming capability, and lacking advertising tie- ins.”

Not very, if recent devaluations at Warner Bros. Discovery and Paramount are any indication.

After losing the NBA, WBD announced on August 7, 2024 that its linear
networks were worth $9 billion less than it previously thought. In a note to clients (obtained by IndieWire), the media analysts at Bank of America said that “the biggest surprise” from Cavanaugh’s announcement is that he arrived
at this conclusion before WBD’s David Zaslav.

Disney’s Bob Iger was the first to publicly discuss the spin off and sale of linear television assets. He beat everyone to the punch by so much he already walked back those comments about broadcast and cable in which he said they
“may not be core” assets. And that was like a year ago.

A single day after WBD’s bombshell, as part of the due diligence process for Paramount Global to be merged with Skydance, Paramount revealed that its
cable channels were overvalued by $6 billion.

Maybe all of these cast-off channels should join forces. Media analysts
believe some combination of these misfits to be between a possibility and an inevitability — so maybe don’t cut your cord just yet.

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Let's go Brandon!

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