Comcast is testing the media industry with the possibility of unplugging cable networks

Comcast It is considering spinning off or spinning off NBCUniversal's cable networks. If this idea goes ahead, it could lay the foundation for reshaping the entire American media landscape.

Comcast's logic is fairly straightforward. NBCUniversal's cable networks aren't growing anymore. The company's energy and focus is on promoting Peacock, NBCUniversal's growing but still money-losing streaming service. Forming a cable portfolio could satisfy Comcast investors by removing declining assets from the balance sheet.

Comcast shares rose more than 3% on Thursday after the company's third-quarter earnings announcement and conference call.

“We are now exploring whether creating a new, well-capitalized company, owned by our shareholders and consisting of our strong portfolio of cable networks, would position them to capitalize on opportunities in the changing media landscape and create value for our shareholders,” Comcast President Mike Kavanagh said. During the call. He added: “We are not ready to talk about any details yet, but we will return to you when we reach firm conclusions.”

Although executives stressed that exploration is still in its very early stages, it could be a precursor to broader industry consolidation. NBCUniversal's cable networks, which include Bravo and E! , Syfy, Oxygen True Crime and USA Network, as well as news networks MSNBC and CNBC, with another media company or could be a catalyst for a cable bundle or consolidation. Channels in a number of different companies.

The idea of ​​clustering is not new. It's something media mogul John Malone discussed in 2016 when Lionsgate acquired premium network Starz.

“Lionsgate could buy Starz and perhaps other free radicals in the industry,” Malone said at the time, referring to cable network groups not owned by larger media conglomerates such as AMC Networks, which is controlled by the Dolan family, or A&E Networks, which is controlled by the Dolan family. Dolan. Owned by Hearst and Disney.

This vision was never realized, in part because the media world's attention shifted from traditional pay TV to streaming, which reduced the value of cable networks. Earlier this year, Warner Bros. announced Discovery reported a non-cash goodwill impairment charge of $9.1 billion, as a result of a reassessment of the carrying value of its television networks segment.

However, the loss of value of cable networks has now created a new opportunity for accretive growth, if companies like Comcast, Warner Bros. Discovery and Disney They decided they wanted to divest their flagging cable assets in favor of focusing on streaming.

So far, media companies have chosen to keep their cable networks, which still generate billions in profits even as millions of Americans cut cable every year.

Comcast may set a die if it moves forward and sees its overall valuation rise.

Ironically, Starz could once again play a role in media change. The small media company wants to be a vehicle to consolidate the cable network, CNBC reported in 2022. Starz is scheduled to separate from Lionsgate at the end of 2024.

There is widespread uncertainty about whether a company consisting solely of cable networks has a viable path forward as a publicly traded entity. Equity investors are usually not fans of declining assets, even if they are cash rich.

But even if Starz doesn't achieve its vision of growing the cable network, the private equity firm would likely be interested in scooping up a bunch of cable networks for money. Apollo Global ManagementFor example, it has had a late interest in acquiring Paramount Global and has made several media-related investments in recent years, including purchasing Yahoo.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.