Comcast’s Hollywood break-up marks its GE moment

{"text":[[{"start":4,"text":"Who has more pulling power, Hollywood stars or the cables that pipe them into viewers’ homes? Comcast on Monday announced that it would separate its legacy broadband and cable television distribution segment from its media and entertainment business. That will involve spinning off NBCUniversal, the television broadcast network and movie studio that it announced in 2009 that it was acquiring from General Electric, as well as Sky in 2018."}],[{"start":30.55,"text":"When Comcast ventured into media, content was king. Legacy media properties were the toast of Wall Street, with a handful of titans dominating the attention of consumers around the world. The Roberts family, which controls Comcast, spun a tale of combining content with distribution, as well as amusement parks. "}],[{"start":48.05,"text":"That narrative held for some time. But the Comcast conglomerate model has fallen out of favour. Its shares are down 60 per cent in the past five years — although that includes the effect of a spin-off earlier this year — and its market capitalisation of $83bn is roughly the same as its net debt"}],[{"start":65.6,"text":"Yet it isn’t clear that the break-up — in and of itself — will solve Comcast’s problems. The NBCUniversal/Sky media business will struggle to keep up with the likes of Netflix, YouTube, Instagram and TikTok."}],[{"start":79.3,"text":"And the once steady cable and broadband business, which generated 70 per cent of Comcast revenue last year and 90 per cent of operating profit, is itself looking less enticing. Cable television subscribers at Comcast have halved from their peak of 20mn a decade ago. And its nearly 30mn broadband internet subscribers are also starting to dip as mobile phone companies are pushing into internet services. Of course, hanging above everything is the shadow of Elon Musk’s Starlink, which has spooked the buyside about the long-term prospects of traditional internet services."}],[{"start":null,"text":"

"}],[{"start":115.9,"text":"Still, some good may come of splitting Comcast up. The group’s shares rose 4.5 per cent on Monday. The separation will help address a conglomerate discount. But there is also the prospect of more dealmaking. Could NBCUniversal be acquired by an Apple or Amazon or other trillion-dollar tech titan that wants to try their hand at making shows and movies?"}],[{"start":135.95000000000002,"text":"But the deal that Wall Street is most intrigued by is the potential combination of the Comcast telco and John Malone’s Charter Communications, whose share price jumped 9.4 per cent on Monday. Shares of Charter, which itself has 30mn broadband subscribers, have also been battered in recent years but a blockbuster merger to take out expenses and reduce overall investments might change the mood. "}],[{"start":160.9,"text":"Former conglomerates have, for various reasons, done well for themselves. GE learned the hard way that owning glamour businesses might be fun for the CEO and board but is not necessarily useful for shareholders. Comcast has now ended up in the same place."}],[{"start":181.60000000000002,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1782797919_3125.mp3"}