On Monday morning Comcast said it is spinning off NBCUniversal as well as its European media arm, Sky, into a new publicly traded company.
The new company – housing the Universal movie studios and theme parks, Peacock streaming service, and brands like NBC, Telemundo and Bravo – will be well positioned for deep-pocketed buyers.
Officially, though, Comcast said the new content business “will be poised for growth” on its own.
Comcast patriarch Brian Roberts said the separation plan “will unlock a more entrepreneurial management approach and open up a multitude of new opportunities for each business.”
But the breakup will require regulatory approval first. Comcast said it expects to complete the spinoff in about a year.
The spinoff announcement was welcomed by investors; Comcast shares traded up more than 20% in premarket trading.
The company’s stock has struggled in recent years, reflecting Wall Street skepticism about its combination of content and distribution and its ability to compete with the likes of Netflix.
Comcast executives recognize that the market is rewarding pure-play companies. So, 15 years after acquiring NBCUniversal to great fanfare, they are unwinding the combination.
Comcast will become more of a pure broadband and wireless company, and NBC will become one of the biggest owners of content.
Comcast has some recent breakup experience: It spun off most of its cable channels, including CNBC and MS NOW, in January.
Industry analysts have predicted further deal-making activity in the wake of Paramount’s pending acquisition of CNN’s parent Warner Bros. Discovery. But it’s much harder to predict what form that activity will take.
Comcast is scheduled to pitch investors about the separation plan later on Monday morning.
The company said that Mike Cavanagh, its current co-CEO, will be the CEO of the new NBCUniversal, also including Sky, which has been operated mostly separately until now.
Former Comcast chief financial officer Michael Angelakis will rejoin the company to run the future version of Comcast once the media assets are spun out.
Comcast is best known for delivering broadband internet to tens of millions of American homes. It also has a growing wireless business and is a provider of technology to other companies across the industry.
The Roberts family will retain control, and Brian Roberts “will remain actively involved with both companies, working closely with Mike and Michael where he will focus on the new areas of growth, creativity and opportunity that this new structure will create,” a memo to employees stated.
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