NBCUniversal executives offered one statistic during the company’s Q4 earnings call that explains everything about why parent company Comcast is preparing to spin off the bulk of NBCU’s cable channels into a separate company: Some 98% of the viewing of NBCU channels on the Peacock streamer is driven by the NBC broadcast mothership and Bravo.
Brian Roberts, chairman and CEO of Comcast, emphasized during the call with Wall Street analysts that NBCU has a strong vision for operating NBC and Bravo — the one cabler that the company will retain — in concert with the bustling Universal Studio TV production arm. NBCUniversal will not, he also stressed, put its entire TV focus on the Peacock streamer. The hope is to create a tighter focus on driving audiences throughout NBC, Bravo and Peacock.
“We’re not really running a Peacock-only strategy. We’re running a broadcast-plus-streaming strategy and looking to optimize that over the years ahead,” said Mike Cavanagh, president of Comcast, who oversees NBCUniversal.
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As for the fate of the channels set to be spun off as a separate entity — CNBC, MSNBC, USA Network, Syfy, Oxygen, E! and Golf Channel — Cavanagh observed, “They weren’t integral to the emphasis we’ve put on Peacock and a streaming future for NBC broadcast in particular. Those assets are going to be better managed and have opportunities in the future that are better optimized for our shareholders by putting them in the hands of the strong leadership team” that was unveiled earlier this month, led by longtime NBCUniversal executive Mark Lazarus, who will become CEO of the spinoff company. The transaction, announced in November, is expected by close by the end of this year.
“The opportunity that that team sees in bringing [NBC, Peacock and Bravo] together in a way that I don’t think would be possible without separating the two different businesses,” Cavanagh said. At the same time, Comcast’s move to spin off the other channels was undertaken to do so while those cablers still have some potential to be reinvigorated. NBCU’s channels, like other traditional cable outlets, have struggled with declining viewership and distribution losses as viewers have flocked to streaming platforms in recent years.
“They’re a freestanding, strong collection of businesses with lots of cash-flow generation capability for many years to come,” Cavanagh said. “I’m optimistic that that creates good opportunities for our shareholders.”
Earlier on the call, Cavanagh stressed that NBCU “will continue to be one of the largest media companies in the world, with nearly $40 billion in annual revenue.”
Executives were also pressed on how NBC and Peacock are planning for the NBA rights that will come back to NBC at the start of the 2025-26 NBA season later this year. Cavanagh acknowledged that the megabucks commitment that NBC made to the 11-year rights pact may lead to price increases or the creation of a premium programming tier at Peacock. But he also cautioned that the company wants to monitor the impact of a full NBA season before making major decisions.
“I would give us the full first season of NBA to sort of normalize our businesses to handle these higher costs,” Cavanagh said.