Nobody wants their cable channels anymore

As one of the country's largest cable television providers, Comcast has suffered some significant cord cuts over the years: About 40 percent of U.S. households have dropped cable television in the last decade. Now even Comcast, NBCUniversal's parent company, isn't sure it wants its own cable channels.

On Thursday, Comcast President Mike Cavanaugh said he had commissioned a study to consider spinning off NBCU's cable channels – including Oxygen, Bravo, MSNBC, CNBC, USA, E! and Syfy – from its studios, theme parks, streamer Peacock and other broadcast networks NBC.

“Like many of our colleagues in the media industry, we are experiencing the impact of change in our video business and have been examining the best path forward for these assets,” Cavanaugh said in prepared remarks during the company's third-quarter earnings call. “To that end, we are now evaluating whether the creation of a new, well-capitalized company owned by our shareholders and comprised of our strong portfolio of cable networks would enable them to capitalize on opportunities in the changing media landscape and create value for our shareholders to accomplish. We are not ready to discuss details yet, but will contact you as soon as we reach concrete conclusions.”

Cavanaugh later called it “an opportunity to go on offense.”

Wouldn't that be a nice change? Cable channel owners have been on the defensive in recent negotiations with cable providers. Charter, currently the only MVPD (multichannel video programming distributor) larger than Comcast (if the Dish-DirecTV merger goes through, that company will be the new No. 1), dumped eight Disney cable channels last year.

What's also important here is what Cavanaugh didn't say – he didn't explicitly state that Comcast/NBCU would then do this sell the (theoretical) spun-off company. (Of course, he didn't say this wouldn't be the case either.)

Either way, it may be too little, too late.

“Unfortunately, spinning off NBCU's cable networks is challenging at this stage of their life cycle, and Peacock's merger with a streaming industry competitor is beyond complicated,” media analysts at LightShed Partners wrote in a blog post Thursday. “We suspect this is much ado about nothing and is simply a sign of how structurally challenged linear cable networks are.”

“When you see a bleak future with no prospect of growth, you sound the alarm and consider strategic alternatives,” they continued.

Analysts at investment bank Macquarie are also not convinced. Of course, it might be good for Comcast shareholders to “remove this declining revenue component” that would “likely weigh on the stock price,” but analysts “question how valuable cable networks would be on their own, without ties to the company's studio and streaming capabilities.” NBCU. and there are no advertising connections.”

Not very, if the recent devaluations at Warner Bros. Discovery and Paramount are any indication.

Following the NBA loss, WBD announced on August 7, 2024 that its linear networks were worth $9 billion less than previously estimated. In a note to clients (obtained by IndieWire), Bank of America media analysts said that “the biggest surprise” of Cavanaugh's announcement was that he came to this conclusion before WBD's David Zaslav.

Disney's Bob Iger was the first to speak publicly about spinning off and selling linear television assets. He was so far ahead of everyone else that he already walked back comments about broadcast and cable, saying they “may not be core businesses.” And that was like a year ago.

A day after WBD's bombshell, Paramount disclosed that its cable channels were overvalued by $6 billion as part of the due diligence process for Paramount Global's merger with Skydance.

Maybe all these outcast channels should join forces. Media analysts believe a combination of these underdogs falls somewhere between possibility and inevitability – so maybe don't let it happen just yet.