NBCUniversal to be split from Comcast in latest media shakeup
Comcast's Strategic Split: Details and Implications
By Aditya Soni and Anhata Rooprai
June 29 (Reuters) - Comcast will split into two publicly traded companies through a spinoff of NBCUniversal and Sky, separating its cash-generating broadband arm from a media and entertainment business under pressure from streaming rivals and industry consolidation.
Shares of the company rose nearly 8% on Monday. The stock has had a rough run, falling more than 17% this year through Friday's close, after two straight annual declines.
Structure of the Proposed Separation
The proposed separation will create one company anchored by Comcast's cable, wireless and business services arm and another built around Universal theme parks, film and TV studios, NBC, Peacock and the European media business Sky.
It unwinds 15 years of consolidation at the company that brought together content and distribution, with both feeling the strain from the rapid rise of streaming, and sets up the two companies for more deals.
It also alters the legacy of Comcast CEO Brian Roberts, who stormed the media world in 2011 when he bought NBCUniversal in a deal that valued the entertainment giant at nearly $40 billion.
Industry Context: Cord-Cutting and Competition
Since then, cord-cutting has eroded profits of the cable TV business of legacy media players, forcing them to seek scale to better compete with streaming giant Netflix. Paramount won a bidding war for Warner Bros Discovery in February with its $110 billion bid to create an industry giant.
Comcast, which leans on cable for much of its cash flow, is also losing broadband customers to fixed wireless offerings from U.S. carriers such as T-Mobile and Verizon and to fiber rivals that are aggressively building out networks.
Leadership and Corporate Structure
"The transaction we are announcing will unlock a more entrepreneurial management approach and open up a multitude of new opportunities for each business," Roberts said.
Roberts, whose father Ralph founded Comcast in 1963, will remain "actively involved" in leading both companies after the split. He controls about a third of Comcast's voting power through super-voting shares, a grip likely to carry over since NBCUniversal will retain the same dual-class structure.
Deal Could Make NBCU an M&A Target
Leadership Changes and Shareholder Impact
Comcast Co-CEO Mike Cavanagh will run the new NBCUniversal, while Michael Angelakis, a former chief financial officer, will return to lead Comcast as CEO, after initially joining as a strategic adviser ahead of the separation.
Shareholders of the cable and media giant will own stock in both companies after the tax-free separation closes, expected to happen in a year.
Comcast will keep a stake of as much as 19.9% in NBCUniversal for up to a year following the spinoff, which it plans to monetize over time.
Comcast will hold a town hall with employees at 1 p.m. ET to discuss the split, an internal memo seen by Reuters showed.
Market Reaction and Analyst Perspectives
Shares of telecom rivals Verizon, AT&T and T-Mobile were all down between 3.9% and 5.8%, while cable firm Charter Communications rose 11.2%.
Analysts said the move could make NBCUniversal an attractive takeover target, especially for Netflix after it lost the Warner Bros bidding war, although any deal was likely to hinge on how Comcast allocates its more than $90 billion in debt.
Potential for M&A Activity
"NBCU will become M&A target eventually. Netflix would likely have interest in the studio," said Ross Benes, senior analyst at eMarketer.
"But I don't expect them to bid on the entire media company and it is unclear if NBCU would be willing to do another split to separate the studio from the rest of the media business."
Comcast executives, however, played down the prospect of M&A on a call to discuss the move, saying "Absolutely not."
"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."
Financial Overview of Comcast's Businesses
Comcast's studio business includes Universal Pictures, DreamWorks Animation and Focus Features and is home to blockbuster franchises such as "Fast & Furious", "Jurassic World" and "Despicable Me". It brought in $11.29 billion in revenue last year, about 9% of the total.
The media business, which includes NBC and Peacock, accounted for 21% of revenue with sales of $27.09 billion in 2025, while theme parks added another $9.84 billion.
The connectivity business that will form the heart of Comcast after the split generated $70.7 billion last year, more than half of total revenue.
Last Major Undoing of Telecom-Media Mergers
Recent Spinoffs and Industry Trends
Comcast recently completed the spinoff of some cable TV networks, including CNBC and USA Network, into Versant Media , which began trading on the Nasdaq earlier this year.
Its latest move marks one of the last great unravelings of the telecom-and-media mergers, a bet that gained popularity in the 2010s as carriers raced to pair distribution with content.
Historical Context and Industry Moves
Comcast itself led the charge with the purchase of NBCUniversal from General Electric. AT&T tried to go even bigger, spending $49 billion on DirecTV in 2015 and $85 billion on Time Warner in 2018, only to spin off WarnerMedia in 2022 and dump DirecTV by 2025.
Analyst Commentary on the Split
"Connectivity and media are no longer naturally moving at the same speed," PP Foresight analyst Paolo Pescatore said.
"It feels like a sensible move, but also a sign of how much pressure there is on legacy media groups to simplify, consolidate and prove where future growth will come from."
(Reporting by Anhata Rooprai in Bengaluru; Editing by Pooja Desai and Sriraj Kalluvila)
