Comcast NASDAQ:CMCSA is preparing to spin off NBCUniversal and Sky into a separate independently traded company, giving investors a cleaner view of the media assets behind Saturday Night Live, The Office, Jurassic Park, Peacock, Telemundo, sports rights and Universal theme parks. The move separates Comcast's media business from its cable-TV, broadband and wireless operations, a shift that could give both sides more focused investment priorities and possibly more flexibility for future deals.
The separation could also put NBCUniversal into the center of the next media consolidation cycle. After Paramount Skydance won the bidding for Warner Bros. Discovery NASDAQ:WBD, a standalone NBCUniversal may become a more attractive target for a media or technology buyer. Netflix NASDAQ:NFLX, which lost the Warner Bros. battle and has shown interest in more deals, could possibly evaluate NBCU's sports portfolio, especially as it invests in NFL games and other live programming. At the same time, Comcast's cable and internet business could eventually be viewed as a possible partner for Charter Communications NASDAQ:CHTR, whose shares jumped 9% Monday after Comcast announced the split.
For investors, the biggest question is whether NBCUniversal can be valued closer to Walt Disney NYSE:DIS, which trades at about 10 times expected EBITDA, versus Comcast's roughly five times. NBCUniversal has support from its Orlando theme park expansion, a new UK park under development, film momentum from Wicked: For Good and Hamnet, and sports-driven strength across NBC, Peacock and Telemundo. Michael Cavanagh is set to lead NBCUniversal when the spinoff happens about a year from now, while Michael Angelakis will return to run Comcast's cable and internet business as Brian Roberts prepares to leave the co-CEO role, though his future as chairman has not yet been decided.