Comcast executives are preparing to split NBCUniversal away from the company’s telecom operations, according to reporting by TheWrap, reversing the logic behind one of the big cable-meets-Hollywood mergers of the last decade-plus.
The move matters because Comcast has been trying to run two very different machines at once: a physical internet access business built around cable and broadband pipes, and a media business built around NBC, Universal, broadcast TV, streaming and studio assets. Those businesses now face different kinds of pain. Techdirt reported that Peacock lost $432 million in the first quarter, while Comcast’s stock has fallen 54% over the past five years.
Comcast CEO Mike Cavanagh framed the planned separation as a question of speed and focus. In comments reported by TheWrap, Cavanagh said Comcast had “changed our mind” and concluded that each business would be better positioned with “focus, speed and strategic flexibility” after a separation. He said the split would allow each company to pursue growth and make better use of its assets.
That is corporate-speak, yes, but the mechanics are straightforward. Comcast would stop housing NBCUniversal inside the same corporate structure as its core telecom properties. The media company would be easier to evaluate, sell, merge or run on its own. The broadband and cable side would no longer have to pretend that owning a Hollywood studio automatically solves the problem of selling internet access in a more competitive market.
The Versant piece came first
Comcast had already moved part of the media pile out of the main house. Earlier this year, the company spun off its cable TV network portfolio into a new company called Versant Media, while keeping Bravo out of that package, according to Techdirt.
That earlier split left NBCUniversal as the larger and more strategically interesting question. TheWrap reported that Comcast executives are now formally unwinding NBCUniversal from Comcast’s telecom assets. Deadline, meanwhile, reported that Comcast leadership has denied that it is looking to sell NBCUniversal as part of the broader round of media dealmaking.
The denial has not convinced everyone watching the company. Tom Nunan, former president of NBC Studios, told TheWrap that the reaction to management’s denial was effectively a collective eye roll. Nunan said Comcast’s recent attempt to pursue Warner suggested the company still wanted to remain a major media buyer. After that failed, he told TheWrap, Comcast appeared to shift “from a buyer to a seller.”
Telecom’s media habit keeps ending badly
Comcast is not the only telecom company to discover that buying media assets does not magically create a coherent media strategy. Verizon’s Yahoo, Tumblr and AOL experiment ended in retreat. AT&T’s purchases of DirecTV and WarnerMedia also became cautionary examples after years of restructuring, layoffs and deal churn.
Comcast’s own problem is narrower but familiar. On the media side, traditional broadcast television is under pressure, and Peacock needs cash to compete in streaming. On the telecom side, Techdirt reported that Comcast has been losing broadband subscribers as cheaper 5G wireless services and community-owned fiber create new competition.
A full sale of the combined Comcast-NBCUniversal structure would be hard for any buyer to absorb, Techdirt argued. A separated NBCUniversal would be a cleaner target for companies such as Netflix, Amazon, Disney or Apple, though Comcast has not announced such a sale and its executives have denied pursuing one.
For now, the confirmed decision is narrower: Comcast’s leadership says it no longer wants NBCUniversal and its internet-access business locked together. The last round of convergence was sold as strategy. The unwind is being sold as flexibility. Same boardroom dialect, different direction.
This story draws on original reporting from Techdirt.
