- Comcast announced Monday it's planning to spin off its NBCUniversal and Sky media units into a separate publicly traded company.
- The announcement, which comes just months after Comcast spun out its cable networks into Versant, is already raising questions of M&A.
- But deals with major media players would face regulatory challenges or simply wouldn't make much sense, leaving few avenues for future tie-ups.
Analysts think
Comcast is priming for deals. Comcast leadership says they're wrong.
The company
announced Monday it plans to separate its two primary businesses — cable broadband and the media units of NBCUniversal and Sky. It's the second major structural change for the decades-old company in recent months, and it's raising questions of potential future deals for either half of the company.
But on a call with investors to discuss the split, Comcast executives came ready with cold water:
"Absolutely not," Comcast co-CEO Brian Roberts said Monday, when asked if investors should view the separation as a potential setup for future deals.
Roberts, son of founder Ralph Roberts and Comcast's controlling shareholder, won't be CEO of either company after the separation but will continue to be "actively involved" in the leadership of both companies, Comcast said.
"This is the right move to put each company in the strongest position to create value, fully monetize its assets, and aggressively pursue its own organic growth strategies," Roberts said.
Co-CEO Mike Cavanagh echoed that denial: "On the NBCUniversal side and [with] Sky, definitely not."
A reason Comcast is squashing deal speculation? There may not be many good ones left.
Wall Street and industry onlookers have called for a split of Comcast for years, motivated by the rise of streaming and severe competition in the media industry.
While company leaders have discussed a separation at various points since at least 2019, executives have never seriously considered it until now, according to a person close to the situation who spoke anonymously due to the private nature of the discussions.
When Comcast decided to siphon off its cable TV networks into a separate publicly traded company less than two years ago — the spinoff that would ultimately become CNBC-parent
Versant Media Group — the prospect of carving out NBCUniversal as a whole never came up, the person said.
Instead, the move to sever NBCUniversal and Sky from the Xfinity cable business came together rather quickly in recent months, the person said.
Wall Street just witnessed a large media deal following an announced spin, noted Mike Proulx, research director at Forrester. Before
Warner Bros. Discovery launched a sale process that resulted in dueling bids from Netflix and Paramount Skydance, WBD said it planned to separate its assets into two companies.
"Comcast is following a playbook we have already seen. Warner Bros. Discovery split itself apart as it moved into a deal with Paramount. Now Comcast is doing the same with NBCUniversal. History matters here because Peacock increases NBCUniversal's acquisition potential," said Proulx.
It comes against the backdrop of widespread consolidation. Paramount Skydance itself is the product of a merger that closed just about a year ago. Soon after closing, it fought off streaming giant
Netflix for the WBD assets.
Smaller deals have come to market too, as the media industry grapples with shifting consumption habits. Earlier this month
Fox agreed to buy streaming platform company Roku for $22 billion. And broadcast station owners have been desperate to combine to gain scale.
With the exception of bidding on WBD, Comcast has stayed away from M&A and has focused on its own businesses.
"There's no surprise that both the media and telecom landscapes have become increasingly competitive and that pace of change continues to accelerate. We simply don't see these conditions changing anytime soon," Cavanagh said on Monday's call.
Cavanagh will be CEO of the media businesses post-spin, Comcast said.
"Our plan for NBCUniversal and Sky is to build and invest for growth. We have the ambition that's big to pursue opportunities that keep us ahead of evolving consumer behavior and audience demands, and we have the freedom now to explore adjacent business where we have the right to play," Cavanagh said.
The motivation behind splitting a company apart is often to open up more deal opportunities. Still, it's not clear what deals the newly created company of NBCUniversal and Sky assets could explore without serious regulatory challenges.
For one, housing broadcast network NBC creates various obstacles. The company wouldn't be able to merge with a company that has another national network, effectively taking
Disney, the owner of ABC, and Paramount Skydance, owner of CBS off the table.
Even eliminating the broadcasters from the equation, a deal with Paramount Skydance — which has been on something of a shopping spree under new CEO David Ellison — would be a stretch following the completion of its deal with WBD.
Fox, the remaining major player in linear TV, has
stayed away from traditional media after hiving off its entertainment assets years ago and likely doesn't have the appetite for another deal after its Roku agreement.
With the WBD sale process Netflix showed it
was open to doing deals — for the right assets.
But Netflix's interest in WBD was in its film studio and streaming assets, casting aside WBD's linear networks. Even with major sports properties like the NFL's Sunday Ticket, the NBA and other top film content, it's hard to imagine Netflix would make such a shift and get into linear TV via a hypothetical deal with NBCUniversal.
That leaves little else on the table when it comes to media deals, with the largest players all pretty much spoken for. Comcast didn't specify Monday what it expects either company to be valued at post-spin, but between the Universal theme parks business, a substantial, albeit small, streamer and a respected content library, NBCUniversal would likely be too large for a smaller player to swallow.
On the cable side, it may be a similar scenario.
The remaining Comcast assets after the spin off — broadband, mobile and pay TV under the Xfinity brand — have gone from gangbusters growth to stagnation and often quarterly losses of broadband customers as competition has ramped up from wireless and satellite providers.
The market immediately rewarded the stock of
Charter Communications, another cable giant in the midst of completing a different acquisition, on Monday after Comcast's announcement.
Charter shares soared 10%, signaling investors could be favoring a possible Comcast and Charter merger, tying up the two largest U.S. cable companies.
Charter and Comcast have both invested heavily in their broadband networks and mobile businesses, even as competition has intensified. They are part of a joint venture in which Charter cable TV customers can use Comcast's Xumo streaming devices.
They've also each aggressively
changed pricing packages to go after and retain customers. But such moves have done little for either stock price.
There's some historical precedent driving Wall Street's anticipation of a potential deal. Comcast attempted to acquire Time Warner Cable in 2014. When Comcast dropped its bid amid regulatory opposition, Charter scooped up the asset — then the nation's second-largest U.S. provider. The majority of modern-day Charter used to be Time Warner Cable.
Still, there's reason for skepticism, according to MoffettNathanson analyst Craig Moffett. The Department of Justice had been prepared to block a Comcast-Time Warner Cable deal. Even if a hypothetical Comcast-Charter deal
got federal approval, it would need state-by-state acceptance, which may not be easy in Democrat-controlled states such as Massachusetts, Illinois and Maryland, Moffett said in an interview.
"You'd have to go through a gauntlet of individual state public service commissions," Moffett said. "There would likely be pretty staunch opposition in blue states that are traditionally opposed to mergers like this."
There's also the enormous debt load that would come with such a combination, according to the person close to the matter.
Charter is in the midst of closing its merger with Cox, which would leave it with a debt load of more than $100 billion after taking on Cox's debt. Assuming Comcast shoulders much of the debt load post-spin in a move to alleviate NBCUniversal — a hallmark of the Versant spinoff was a low amount of debt on the new company — combining the two cable companies would create a hefty debt burden, the person said.
There are also strategic questions about a Charter-Comcast deal. In 2014, when Comcast tried to buy Time Warner Cable, one of the driving forces of that transaction was the ability to gain leverage over media programmers in TV carriage disputes by adding subscribers. More than a decade later, the cable TV business has become a far smaller component of both Charter and Comcast, diminishing the value of this potential synergy.
There are few broadband synergies by simply owning more customers, Moffett said. Cable businesses are local operations that are largely unaffected by adding scale, he said.
"Your cost structure in Chicago isn't meaningfully affected if you own systems in North Carolina," Moffett said.
To be sure, former Comcast chief financial officer and incoming CEO of the cable assets post-spin, Michael Angelakis, said Monday he believes the company has the network assets it needs to compete.
Rather than an immediate transaction, Comcast may be looking years ahead.
"It may not be imminent. But I think it probably sets the stage on the M&A front," said Jonathan Miller, a media industry veteran, who currently serves as chief executive of Integrated Media, which specializes in digital media investments.
"This is literally done for the purpose of having more optionality around different opportunities," Miller added.
Timing of a future deal may also come down to technicalities. Comcast estimated a one-year timeline to close the split. After that,
standard U.S. tax regulation compels potential acquiring companies to wait even longer before acquiring a recently spun-off target. However, depending on details such as the kind of deal and timing, there are varying degrees to just how long a company has to wait, the person familiar said.
Disclosure: Versant Media Group is the parent company of CNBC.<small>Source: CNBC</small>
Business
Comcast's NBCUniversal spinoff raises hope for more deals. There may not be good options
CNBC
June 29, 2026
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