Comcast might take its cable TV networks business for a spinComcast might take its cable TV networks business for a spin

Comcast is exploring a plan to possibly spin out a cable TV networks business that includes channels such as Bravo, CNBC, Syfy, USA Network, E! and MSNBC. However, the study does not include the NBC broadcast network or Peacock, NBCUniversal's direct-to-consumer streaming service.

Comcast is evaluating the fate of its cable networks as that part of the business continues to be pressured by pay-TV cord-cutting.

"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," Comcast President Mike Cavanagh said today on the company's Q3 2024 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 challenging landscape and create value for our shareholders."

'A very welcome development'

Cavanagh said it's too early to talk specifics and didn't outline a timeline on when Comcast might decide on that path forward. But some analysts already like the idea.

The possibility that Comcast's strategic review might result in a spin-out of its legacy cable programming networks business "is a very welcome development," MoffettNathanson analyst Craig Moffett said in a research note (registration required). "Investors have yearned for exactly this, or at least something close to it, for years."

Word of Comcast's review comes as major programmers grapple with legacy programming businesses that are under severe financial pressure from pay-TV cord-cutting.

That trend continues to show up in Comcast's cable video business. Comcast shed 365,000 video subs in Q3, improved from a year-ago loss of 490,000. Comcast Cable President and CEO Dave Watson attributed some of that subscriber improvement to Now TV, a relatively new, prepaid streaming service that costs $30 per month and includes a lineup of entertainment channels as well as the ad-supported tier of Peacock.

Meanwhile, Peacock, NBCU's direct-to-consumer streaming service, gained subs and revenues.

Aided by coverage of the summer Olympics in Paris, Peacock added 3 million subs, extending its total to 36 million. Peacock revenues were $1.51 billion, up from $830 million a year ago. Peacock's peak losses are in the past, but the service has yet to turn the financial corner – it posted a $436 million EBITDA loss in Q3, widened from -$348 million in the prior quarter.

"We have almost certainly seen the bottom of the Peacock drag," Moffett noted. However, "[N]one of this is a guarantee that Peacock will ever achieve anything like meaningful profitability; Peacock may never be a truly good business."