Comcast and NBCUniversal signing in the lobby of Comcast's headquarters in Philadelphia, Pa.Bastiaan Slabbers/Reuters
Comcast CMCSA-Q will split into two publicly traded companies through a spinoff of NBCUniversal and Sky, separating its cash-generating broadband arm from a media and entertainment business under pressure from streaming rivals and industry consolidation.
Shares of the company rose more than 20 per cent in premarket trading on Monday.
The latest U.S. media industry shakeup follows years of cord-cutting as legacy players chase scale to better compete with Netflix NFLX-Q while Paramount Skydance’s PSKY-Q US$110-billion deal for Warner Bros Discovery WBD-Q is set to boost competition.
Comcast, which leans on cable for much of its cash flow, is also losing broadband customers to fixed wireless offerings from T-Mobile TMUS-Q and Verizon VZ-N and to fibre rivals building out networks.
“The transaction we are announcing will unlock a more entrepreneurial management approach and open up a multitude of new opportunities for each business,” Brian Roberts, chairman and co-CEO of Comcast, said.
The split, expected to be completed in about a year, will create one company anchored by Comcast’s cable, wireless and business services arm and another built around Universal theme parks, film and TV studios, NBC, Peacock and the European media business Sky.
James Murdoch buys three Vox Media divisions in deal worth more than $300-million
Mike Cavanagh, Comcast’s co-CEO, will run the new NBCUniversal. Michael Angelakis, former chief financial officer, will return to lead Comcast as CEO, after initially joining as a strategic adviser ahead of the separation.
Comcast shareholders will own stock in both companies after the deal closes.
The company will keep a stake of as much as 19.9 per cent in NBCUniversal for up to a year following the spinoff, which it plans to monetize over time.