The TV industry’s corporate musical chairs continues, with Comcast once again getting into the game. And now, the company is explaining its reasoning.
On Monday, Comcast announced it’s planning a tax-free spin-off of NBCUniversal and Sky. The move separates the company into two entities, with Comcast focusing on technology and platforms and NBCU focusing on media and entertainment.
The transaction is expected to be completed in a year, according to Comcast.
Regarding leadership, Brian L. Roberts will continue working across both Comcast and NBCUniversal, with Mike Cavanagh taking the CEO job at NBCU and Comcast’s former CFO, Michael Angelakis, becoming the CEO of Comcast following the separation, while joining as a strategic advisor ahead of the split.
On an investor call following the news, one major question was: “Why?”
Why Comcast and NBCU are splitting
During the investor call, executives noted that the move will give each company more flexibility in a rapidly changing landscape, a more focused capital-allocation framework, and the ability to move faster with partners specific to their business.
“Where we previously believed that scale and the diversification benefits warranted operating these businesses as one company, we’ve now simply changed our mind about that,” Cavanagh said in the call. “We’ve now concluded that future success for each of our businesses will depend on focus, speed, and strategic flexibility that this separation will unlock.”
Overall, Comcast’s Board is pursuing a move to better position the company for its strategic priorities as it focuses on growth and delivering technology to its more than 65 million residential and business customers through broadband, wireless, and entertainment platforms.
Meanwhile, NBCUniversal—whose portfolio of brands will include its theme parks division, Universal film and television studios, NBC and Telemundo networks, Peacock, Bravo, and European business Sky—will also be able to move more quickly as the media landscape continues to shift, enabling its pursuit of future growth and value creation.
“We have the ambition that’s big to pursue opportunities that keep us ahead of evolving consumer behavior and audience demands, and we have the freedom now to explore adjacent businesses where we have the right to play,” Cavanagh said.
The move was also made with the idea that each company had enough scale to preserve commercial relationships and create value for one another, Roberts noted.
“We would not be doing this if we thought either company would be disadvantaged with distributors, content partners, technology partners, advertisers, or consumers,” Roberts said. “The conclusion we reached is that both businesses have ample scale where it matters most and will remain the premier partners in their respective industries.”
