Comcast has announced it will divide into two independent, publicly traded companies by spinning off NBCUniversal and Sky, drawing a clear line between its steady broadband and cable revenue stream and a media and entertainment division facing mounting pressure from streaming competitors and industry consolidation.
The news sent Comcast shares surging more than 20% in premarket trading on Monday.
The announcement is the latest major shakeup in the American media landscape, coming after years of consumers cutting the cord on traditional cable. Legacy media companies have been scrambling to grow in order to keep pace with Netflix, while a $110 billion deal merging Paramount Skydance with Warner Bros Discovery is expected to intensify competition even further.
Comcast relies heavily on its cable division for cash flow, but the company has also been losing broadband subscribers to fixed wireless services offered by T-Mobile and Verizon, as well as to fiber internet providers expanding their networks.
Brian Roberts, chairman and co-CEO of Comcast, described the strategic reasoning behind the decision. “The transaction we are announcing will unlock a more entrepreneurial management approach and open up a multitude of new opportunities for each business,” he said.
The separation is expected to be finalized within approximately one year. When complete, one company will be built around Comcast’s cable, wireless, and business services operations. The other will be centered on Universal theme parks, film and television studios, NBC, the Peacock streaming platform, and the European media company Sky.
Mike Cavanagh, who currently serves as co-CEO of Comcast, will take the helm of the new NBCUniversal entity. Meanwhile, Michael Angelakis, a former chief financial officer for the company, will return to lead Comcast as CEO. Angelakis had previously come back to the company as a strategic adviser in advance of the planned separation.
Current Comcast shareholders will hold stock in both companies once the transaction is finalized. Comcast also intends to retain a stake of up to 19.9% in NBCUniversal for as long as one year after the spinoff, with plans to convert that stake into cash over time.
