Comcast's potential cable networks separation will test the appetite for media reconfiguration

Comcast is thinking astir separating oregon spinning off NBCUniversal's cablegram networks. If it moves guardant with the idea, it could laic the groundwork for a reconfiguration of the full American media landscape.

The logic for Comcast is reasonably straightforward. NBCUniversal's cablegram networks aren't increasing anymore. The company's vigor and absorption is connected promoting Peacock, NBCUniversal's increasing (but inactive money-losing) streaming service. Carving retired the cablegram portfolio could placate Comcast investors by removing declining assets from the equilibrium sheet.

Comcast shares gained much than 3% Thursday aft the company's third-quarter net merchandise and league call.

"We are present exploring whether creating a caller well-capitalized company, owned by our shareholders and comprised of our beardown portfolio of cablegram networks, would presumption them to instrumentality vantage of opportunities successful the changing media scenery and make worth for our shareholders," Comcast President Mike Cavanagh said during the call. "We are not acceptable to speech astir immoderate specifics yet, but we'll beryllium backmost to you arsenic and erstwhile we scope steadfast conclusions."

Though executives stressed that the exploration is successful the precise aboriginal stages, it could beryllium prelude to broader manufacture consolidation. NBCUniversal's cablegram networks, which see Bravo, E!, Syfy, Oxygen True Crime and USA Network, arsenic good arsenic quality networks MSNBC and CNBC, could beryllium merged with different media institution oregon could beryllium a catalyst for a rollup of cablegram channels astatine a fig of antithetic companies.

The thought of a rollup isn't new. It's thing media mogul John Malone discussed mode backmost successful 2016 erstwhile Lionsgate acquired premium web Starz.

"Lionsgate could bargain Starz and perchance different escaped radicals successful the industry," Malone said then, referring to cablegram web groups not owned by larger media conglomerates specified as AMC Networks, which is controlled by the Dolan family, oregon A&E Networks, which is co-owned by Hearst and Disney.

That imaginativeness ne'er materialized, successful portion due to the fact that the media world's attraction shifted from accepted wage TV to streaming, which devalued cablegram networks. Earlier this year, Warner Bros. Discovery reported a non-cash goodwill impairment complaint of $9.1 billion, triggered by the reevaluation of the publication worth of its TV networks segment.

Still, the nonaccomplishment of worth for cablegram networks has present led to a caller accidental for a rollup, if companies similar Comcast, Warner Bros. Discovery and Disney determine they privation to shed declining cablegram assets successful favour of focusing connected streaming.

Thus far, media companies person opted to support their cablegram networks, which inactive pump retired billions successful nett adjacent arsenic millions of Americans chopped the cord each year.

Comcast whitethorn acceptable a template if it moves guardant with a rotation and sees a spike successful its wide valuation.

Ironically, Starz could again play a relation successful a media shakeup. The tiny media institution wants to beryllium the vehicle for a cablegram web rollup, CNBC reported successful 2022. Starz is acceptable to abstracted from Lionsgate astatine the extremity of 2024.

There's wide uncertainty if a institution that consists of lone cablegram networks has a viable way guardant arsenic a publically traded entity. Equity investors typically aren't fans of declining assets, adjacent if they're currency rich.

But adjacent if Starz doesn't execute its imaginativeness of a cablegram web rollup, it's imaginable a backstage equity steadfast whitethorn person involvement successful harvesting a radical of cablegram networks for cash. Apollo Global Management, for one, had precocious involvement in acquiring Paramount Global and has made respective media-related investments successful caller years, including buying Yahoo.

Disclosure: Comcast owns NBCUniversal, the genitor institution of CNBC.