Comcast considers spinning off cable channels like MSNBC. But analysts have doubts

NBCUniversal parent Comcast Corp. is considering spinning off its cable networks into a separate company as the media giant continues to grapple with massive changes in the overall linear television business.

Folding the cable networks into their own company owned by Comcast shareholders could “position them to take advantage of opportunities in the changing media landscape and create value for our shareholders,” President Michael Cavanagh told analysts Thursday during Comcast’s third fiscal quarter earnings call.

“Like many of our peers in media, we are experiencing the effects of the transition in our video businesses and have been studying the best path forward for these assets,” he said, adding that the company was not ready to talk about specifics yet, but would update investors when there were “firm conclusions.”

NBCUniversal’s cable networks include USA Network, Bravo, MSNBC and Syfy.

Comcast also said it would consider partnerships for its streaming business, which has lost billions of dollars since launch.

The consideration comes as the cable television business is undergoing upheaval. As customers have turned to streaming services, they are continuing to cut the cord, leading to major concerns for legacy TV businesses. Paramount Global and Warner Bros. Discovery recently wrote down the value of their cable channel segments by billions of dollars.

But analysts were skeptical of such a move by Comcast to unload its cable channel assets.

These networks are able to maintain carriage and increase their fee rates with distributors in part because they’re bundled with broadcast network NBC. In addition, much of the content from the cable networks feeds into NBCUniversal’s streaming service, Peacock, Ric Prentiss, managing director at Raymond James, wrote in a Thursday note to clients.

“Splitting off these declining assets may be alluring, but we think there are complexities and dis-synergies in doing so,” he wrote. “Perhaps a private equity owner would find them attractive, but we think a standalone public stock may not perform well.”

Media analyst Rich Greenfield of LightShed Ventures was even more blunt, noting the extreme complexity of such a potential deal.

“We suspect this is much ado about nothing,” he wrote in a note to clients. “When you see a dismal future, with no path to growth, you sound the alarm and explore strategic alternatives.”

Walt Disney Co. Chief Executive Bob Iger previously floated the idea of spinning off the Burbank entertainment giant’s linear TV businesses, but later walked the comments back.

Comcast’s stock rose 3% to $43.67 after reporting generally positive earnings, thanks in part to a boost from the Summer Olympics. The shares are flat year-to-date.