Comcast’s plans to spin off its cable TV networks like MSNBC and CNBC into a separate publicly traded company, is an opportunity for it to focus on its main profit drivers, says one analyst.
In an interview with BNN Bloomberg Thursday, Sam McHugh, head of telecom equity research at BNP Paribas, said that while the channels are a revenue driver for the company, they are no longer part of its core business.
“These cable TV channels have been in somewhat of a secular decline for many years,” said McHugh, adding the media, entertainment and theme parks business makes up only 20 per cent of the company’s revenue.
Comcast’s core businesses are selling broadband internet to households and firms in America along with its European operations, McHugh notes.
While Comcast will retain the NBC broadcast network, Bravo and its Peacock streaming service, McHugh said this shift highlights the pressures of cable-cutting across the industry.
“I think this is a big signal to the rest of the market, to some of their peers to say ‘look, we need to change the future here’,” he said.
This isn’t the first time a major U.S. network has explored selling its television assets recently.
Last year, Disney CEO Bob Iger drew attention for his comments about a potential sale of the ABC television network. He later walked back those comments saying he was trying to get reaction from the investment community.