WASHINGTON (AP) — Comcast will spin off many of its cable television networks that were once at the heart of the entertainment giant, with people increasingly swapping out their cable TV subscriptions for streaming platforms.
Those one-time stars for Comcast's NBCUniversal cable television networks include USA, Oxygen, E!, SYFY and Golf Channel, as well as CNBC and MSNBC. Movie ticketing platform Fandango and the Rotten Tomatoes movie rating site would also become part of the new company.
Peacock will remain with Comcast, as will Bravo, which provides significant content for the Peacock streaming service.
Comcast telegraphed the potential shift last month as it released quarterly earnings before confirming Wednesday that it will spin off assets that generated about $7 billion in revenue over he past 12 months ending September 30. That's about 5.5% of Comcast's total revenue during that period, according to the company.
But there is a shrinking pool of cable subscribers as millions cut the cord and rely increasingly on streaming platforms for entertainment.
The number of people dumping cable for streaming is expected to hit 160 million by 2028, compared with 124 million this year, according to Paul Verna, principal analyst at market research company eMarketer, and researchers there.
“Like millions of US consumers, Comcast finally cut the cord by divesting itself of most of its cable TV channels,” said Verna. “The benefits are clear to Comcast. It’s dropping money-losing assets from a technology and media empire that will retain its lucrative (internet service provider) business, theme parks, broadcast networks, and Peacock streaming service.”
But how this new spin-off company will fare independently is less promised, he adds — pointing again to cable's “hemorrhaging subscribers and ad revenues" overall.
Mark Lazarus, current chairman of NBCUniversal Media Group, will serve as the new entity’s chief executive officer. Anand Kini, the current chief financial officer of NBCUniversal, will take on the same title with the new company as well as the chief operating officer role.
"As a standalone company with these outstanding assets, we will be better positioned to serve our audiences and drive shareholder returns in this incredibly dynamic media environment across news, sports and entertainment," Lazarus said Wednesday.
Comcast expects the new company to have the financial flexibility to be “a potential partner and acquirer of other complementary media businesses.”
The spin-off is targeted for completion in about a year, the entertainment giant said, pending financing and approval from its board and government regulators.
Shares of Comcast, based in Philadelphia, were essentially flat Wednesday.
Like other cable companies, Comcast in recent years has shifted its business emphasis away from traditional cable toward streaming and other sources of revenue, such as its movie studio, theme parks and home wireless and internet services.
In its most recent quarter, Comcast reported that paid subscribers to its streaming Peacock channel jumped by 3 million, or 29%, to 36 million subscribers. Peacock’s revenue soared 82% to $1.5 billion in the period.
Peacock was launched in 2020, and after a confusing, glitchy start, has taken off recently, boosted in part by the platform’s success and popularity during the 2024 Paris Olympic Games.
Peacock streamed all 329 medal events and over 5,000 hours of coverage during the Games, with viewers streaming more than 23 billion minutes of Olympic coverage, led by Peacock. That's a 40% increase over all previous Summer and Winter Olympics combined, Comcast said.
Comcast reported revenue of more than $32 billion and profit of $1.12 per share in its most recent quarter, boosted by the summer box-office success of "Despicable Me 4," which grossed more than $1 billion worldwide.
The company expects to open its Epic Universe theme park in Orlando in May of next year.
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AP Business Reporter Wyatte Grantham-Philips contributed to this report from New York City
Matt Ott, The Associated Press