Comcast is proceeding with plans to separate its NBCUniversal cable TV networks, including CNBC, MSNBC and E!, with an announcement expected on Wednesday, according to reports.
During its October quarterly earnings call, the company informed investors that it was considering spinning off its cable networks into a separate entity owned by Comcast's shareholders. Cable businesses have struggled due to the rise of streaming content.
The firm was exploring the creation of "a new, well-capitalized entity owned by our shareholders, comprised of our strong portfolio of cable networks," Comcast President Mike Cavanagh stated, CNBC reported.
While the networks USA, Oxygen, E!, Syfy and Golf Channel will be separated, the NBCUniversal division will retain Bravo, the NBC broadcast network, the Peacock streaming service and other assets like NBC Sports and the Universal theme parks.
The spinoff is expected to be completed within a year as the company assesses the need for new licensing agreements and decides whether MSNBC and CNBC will continue collaborating with NBC News.
The cable networks were a key draw when Comcast acquired NBCUniversal in 2011, but with more people turning to streaming services, it has led to a decline in cable TV subscriptions and viewership, Reuters reported.
Traditional TV networks do remain crucial for media companies. In October, Comcast reported that its media division, which is mostly made up of TV networks, saw a nearly 37% rise in revenue for the third quarter, totaling $8.23 billion, due to the Olympics. Without the Games, the revenue still grew by nearly 5%.
Those networks generated around $7 billion in revenue over the last 12 months.
Mark Lazarus, the chairman of NBCUniversal's media group, will lead the new entity, with Anand Kini, NBCUniversal's Chief Financial Officer, serving as its CFO and operating chief.
Comcast Chairman and CEO Brian Roberts will keep a voting position in the company but will not have an officer role or sit on the board of directors.
MoffettNathanson analyst Craig Moffett says, "Investors have yearned for exactly this, or at least something close to it, for years," CNN reported.
The spinoff was first reported by The Wall Street Journal.
