Comcast on Monday said it will spin out its content division NBC Universal and Sky Group into a separate, publicly-traded company while retaining a minority investment in the new venture for at least one year.
The tax-free transaction will leave Comcast focused on broadband, wireless and business services, while NBC Universal will become a standalone global media and entertainment company encompassing Universal Pictures, Universal Television, NBC, Telemundo, Bravo, Peacock, the company’s theme parks business and European broadcaster Sky. The spin-out will also include dozens of NBC- and Telemundo-owned local broadcast television stations.
Upon completion of the transaction, Comcast shareholders will own shares in both companies. The separation is expected to close in approximately one year, subject to approval by Comcast’s board, regulatory clearances, financing arrangements and customary closing conditions, Comcast said in a statement.
The restructuring marks one of the biggest transformations of Comcast’s business since it first acquired NBC Universal in 2011 — larger than the spin-out of its cable networks business into Versant, which now houses former assets like SyFy, E!, Golf Channel and USA Network.
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The newly-formed NBC Universal will operate as a pure-play media and entertainment company with a portfolio spanning film, television production, broadcast networks, streaming, sports, news, theme parks and international television through Sky.
Leadership changes will accompany the separation: Current Comcast Co-Chief Executive Officer Mike Cavanagh will become Chief Executive Officer of NBC Universal, while former Comcast Chief Financial Officer Michael Angelakis will return to lead Comcast as Chief Executive Officer after the transaction closes. Angelakis will join Comcast immediately as a strategic advisor before assuming his new role.
Comcast Chairman and Co-Chief Executive Officer Brian Roberts will remain actively involved with both companies, working alongside the leadership teams of Comcast and NBC Universal following the separation.
“This is a very exciting day for our company,” Roberts said in a statement. “The transaction we are announcing will unlock a more entrepreneurial management approach and open up a multitude of new opportunities for each business.”
Cavanagh said both companies would begin their next chapter “from positions of strength,” adding that NBC Universal would have the brands, intellectual property, creative talent and financial resources needed to compete in an increasingly competitive global media market.
The company said Comcast intends to retain an ownership stake of nearly 20 percent in NBC Universal for as long as one year after the spin-off before monetizing that position in a tax-efficient manner. Both companies are expected to launch with investment-grade balance sheets.
The announcement comes as traditional media companies continue reshaping their portfolios in response to declining linear television audiences, the continued growth of streaming and increased competition from technology companies and digital platforms
Last year, Paramount Global merged its operations with Skydance Media a part of a blockbuster combination of an emergent Hollywood studio and content distributor rooted in technology with a legacy company that brought several well-known brands into the mix. Paramount is now pursuing an acquisition of Warner Bros Discovery (WBD), which received sign-offs from the U.S. Department of Justice’s antitrust division earlier in the month but still awaits final approvals from regulators in Europe and elsewhere.
Fox Corporation recently committed $22 billion to acquire streaming hardware maker and platform developer Roku, which marries the news and sports giant with one of the most-used connected television (CTV) systems in North America.
