Comcast announced that it plans to separate its media business from its mobile and broadband network businesses. This is also a new round of restructuring measures in the US media industry. After the news was announced, the group's share price rose by more than 20% on Monday. The U.S. media giant said it expects to spin off NBCUniversal and Sky through a tax-free spinoff within a year to complete the split; existing shareholders will hold shares in both Comcast and the new independent media company.
The traditional media industry in the United States is currently struggling to transform as audiences continue to shift to social media and streaming media platforms.
Paramount Skydance Group is expected to finalize a $111 billion acquisition deal to acquire Warner Bros. Discovery by the end of this summer, and the two established film and television companies from the silent film era will officially merge.
Before this announcement, Comcast's stock price had fallen by approximately 30% in the past year, and the company's market value once fell to US$82.7 billion, a ten-year low. At the same time, competitors such as Elon Musk’s Space Exploration Technology Company (SpaceX) have also brought new impacts to Comcast’s Internet broadband business.
After the news was disclosed, Comcast's stock price rose by more than 20% before the market opened.
In January this year, Comcast spun off its cable television business into an independent company, Versant, which includes channels such as Consumer News and Business Channel (CNBC) and USA Network.
This latest spin-off will create a new media giant with operations covering Universal Studios, the Peacock streaming platform and Sky TV outside the United States. Universal NBC holds media assets such as NBC, Spanish-language television network Telemundo, and DreamWorks, and operates multiple theme parks and resorts.
After the spin-off is completed, Comcast will focus on operating broadband and wireless network businesses, with 65 million users in the United States.
According to multiple people familiar with the matter, the split is aimed at streamlining the business structure and making the company more attractive to investors: some investors prefer broadband business with stable cash flow, while others want to invest in purely listed media companies.
People familiar with the matter also said that after the two companies operate independently, it will be more convenient to conduct business cooperation and mergers and acquisitions in the future. Last year, Comcast participated in a bid to acquire Warner Bros. Discovery, but the deal was ultimately won by Paramount Skydance Group.
Comcast said it will build a solid investment-grade balance sheet for the two new companies, allowing both parties to have sufficient financial flexibility to advance their respective development strategies.
According to multiple industry insiders, Comcast is expected to officially announce an acquisition of approximately 1.6 billion pounds in the next few weeks to acquire the broadcast business of the British Independent Television (ITV) and further consolidate its media layout in the UK before the spin-off.
Comcast plans to retain up to 19.9% of Universal NBC's shares within one year after the spin-off is completed, and then gradually reduce and sell the shares through tax optimization.
Comcast said that after the management structure adjustment, the company's chairman and CEO Brian Roberts will still be deeply involved in the operation and management of the two companies; co-CEO Mike Kavanagh will serve as CEO of Universal NBC, and former CFO Michael Angelakis will take charge of Comcast's parent company.