The cable-TV networks business being spun off by Comcast Corp. will explore acquiring other cable channels and creating its own streaming services to grow after separating from its parent.
Channels specializing in documentaries or food-related shows are among the options for the new company, according to people familiar with the plans. Those are two programming areas the current portfolio lacks.
The spinoff, which hasn’t been named, could also create its own streaming business or packages of channels for online distributors like Amazon.com Inc., said the people, who asked not to be identified discussing nonpublic information. The spinoff will likely negotiate its own distribution deals with pay-TV distributors when its current contracts run out.
Philadelphia-based Comcast on Wednesday formally announced plans to divest most of its cable-TV networks, including MSNBC, CNBC and the USA Network, into a new publicly traded company. The networks generated about $7 billion in revenue over the past 12 months and reach about 70 million US households, the company said.
Cable networks have been a drag on Comcast’s business as consumers continue to cancel pay-TV services in favor of streaming options like Netflix Inc. While the spinoff doesn’t need to acquire more channels, that could be an option as pay-TV distributors look to create more bespoke packages of channels with network owners.
Comcast is keeping the NBC broadcast network and the Peacock streaming service. While Peacock is losing money, it is considered a growth business as consumers switch to online viewing. The most popular programming on both is sports, and Comcast has decade-long rights for the NFL and, starting next year, the NBA. Programs from the channels being spun off represent just 2% of the viewing on Peacock, the people said.
Bravo, a channel specializing in reality TV, is also staying with Comcast because its programming is popular on streaming. Spanish-language network Telemundo will also remain part of Comcast because its audience is considered a growth market.
In a potential bright spot in a media industry buffeted by layoffs in recent year, the spinoff could be opportunity for Comcast to avoid some job reductions: The new company will need to build its own corporate infrastructure. The company will negotiate intercompany agreements on issues like advertising sales, programming and other corporate services.
Mark Lazarus, who’ll be chief executive officer of the new business, told employees Wednesday that a new name for the MSNBC news network could be among the changes, according to Variety.
Under the spinoff plan, shareholders of Comcast will receive stock in the new company, which will also include Oxygen, E!, SYFY and the Golf Channel. It will also own complementary digital assets including Fandango and Rotten Tomatoes, GolfNow and Sports Engine.
Comcast Chairman Brian Roberts, who holds a one-third voting stake in his company, will have a similar holding in the new company.
The spinoff is expected to take a year to be completed.
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