Comcast is Unbundling... Comcast
Todd Spangler
We're just six months from Comcast casting off their cable networks to the island of misfit toys in the form of the wonderfully generically named 'Versant'. Now Comcast is at it again:
Comcast, just months after shedding most of its cable TV business into Versant Media, is now again cleaving itself into two separate companies: one housing its namesake cable and tech operations, and the other comprising the NBCUniversal and Sky media biz.
Under the proposed separation, announced Monday, Comcast intends to make a tax-free spin-off of NBCUniversal and Sky. After the transaction is completed, Comcast shareholders will own shares in both Comcast and NBCUniversal.
The big question, of course, would be "why?" The answer, of course, would be "buy." As in seemingly no one is buying Comcast shares of late, with the stock down quite a bit post-Versant spin-off. At the same time, no one is yet buying Versant, the company, which was long thought to be the whole reason for the split.
Paramount Skydance's deal for Warner Bros Discovery probably threw a wrench into those plans. Because until David Ellison came along, the plan was for Warner Bros and Discovery to also split into two this year – and boy wouldn't it seemingly make sense for Discovery and Versant to be one bucket of assets that no one really wants, but at scale? A Netflix deal still could have made that work as they didn't want the networks, but sadly, the path for Paramount to win the deal was to buy the whole thing.
Anyway, unless the soon-to-be Paramount Skydance Warner Bros Discovery – or, as I like to call it, MountDanceWarBroDisco – wants to also pick up Versant (or sell off some of their cable assets to Versant),1 we're about the have three different public companies whereas once there was one in Comcast. Presumably it's a bit of a "the sum of the parts will be greater than the whole" play. But also presumably a big part of that wouldn't be to have three different public companies, but instead for someone to buy at least two of them.
Beyond Versant, the obvious one would be NBC Universal, which has a long, illustrious history of being merged, bought, and sold. Netflix, having lost the Warner Bros sweepstakes would be the obvious buyer here. But it's also not as clean and clear as Warner Bros. The Universal IP isn't as good and the great TV shows associated with NBC are often owned/controlled by someone else. Unlike with Warners, they'd also get one of the broadcast networks, which the current administration may not like too much, and Netflix may not want the headache of owning. Also, they'd get Sky, which could be an international headache.
They'd also get some theme parks, which maybe they'd be interested in to beef up their "experiences" play and better take on Disney – but who knows?
Would Apple be interested? They might look as some of their content would help bulk up Apple TV, but probably not for all the headache reasons. YouTube? Maybe, but they might not be allowed to buy such a property given their rising strength. Disney, which owns ABC, wouldn't be allowed to buy another network. MountDanceWarBroDisco wouldn't be able to for the same reason and more. Amazon? Maybe? There are some sports rights...
Speaking of, the talk has long been that Peacock would need to merge with someone to get to a scale that can hold a candle to Netflix and Disney+. The thought there has also long been HBO Max and/or Paramount+. But now Peacock is sort of the player without a seat with the music stopping in musical chairs. Perhaps that's what prompted this move as well.
We'll see who buys what. Regardless, people are at least buying up the stock once again on this news – Comcast is currently up 23% in pre-market trading.
One more thing: Given that the current co-CEO of Comcast, Mike Cavanagh, will be the CEO of NBCU, maybe they believe the more likely asset to be sold is the Comcast telecom business, where the old Comcast CFO, Michael Angelakis, is coming back to steer the ship? Given all the talk about SpaceX trying to tie-up with Charter to use their spectrum to help launch a consumer satellite/cellular hybrid wireless service for Starlink... well guess who else has wireless spectrum?
Is this a quick play for SpaceX to buy Comcast ahead of partnering with Charter?!
1 Perhaps there's a way for Paramount to sell off CNN to Versant and/or the new NBCU to placate some state attorney generals (and CNN itself)? ↩
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