About a month ago, Comcast surprised but did not shock the media world by announcing that they were divesting most of their cable channels. The properties affected were: CNBC, MSNBC, E!, SPFY, USA, OXYGEN and The Golf Channel.
Some observers said that it was a good thing as some of the networks could move into the digital world and dodge the problems cable is facing with millions of Americans cutting the cord. Tom Rogers, former head of NBC Cable and the creator of both CNBC and MSNBC saw the move as positive as his former “children” could be more imaginative and pursue other avenues with new revenue streams.
Others said the job of the capable management that is taking over the new entity will merely manage the decline of these cable channels as best they can. Watching coverage of the story the term “problem assets” has cropped up with some frequency. That, to me, does not bode well for the venture.
A few optimists have said that private equity groups may come in and prop up a channel or two. Possibly, but my observing private equity over several years usually indicates that the partners do well and often leave the entity saddled with debt.
To the credit of Comcast, they are spinning off this new entity debt free. That is most unusual and highly ethical. A handful of pundits have suggested that Paramount and Warner/Discovery spin off their channels or merge with Spinco. It does not appear that they would be debt free so a merger might not be a good thing for Spinco.
Who could survive? I would say that CNBC has the best chance of the group. Their offices are in New Jersey rather than Rockefeller Center. Also, they are an established brand that has a devoted following (me included). Ad revenue has been good, and some say they currently give back profits to Comcast. In the digital world, they may be able to gin up enough subscribers to survive and prosper. They may be an attractive target for a behemoth in the financial world but that might slant their editorial content.
MSNBC has a bigger problem. Their offices are in the same building as NBC News and they will lose the support they can get from them. Also, their audience, never huge to begin with, has taken a big hit since Trump won the election on November 5th. Their programming is interesting but rather strident politically which may not appeal to advertisers.
The Golf Channel is a niche player and perhaps they could be absorbed by another big sports entity.
One final not so minor issue. Can these channels keep their names for a while? That would be very helpful as they try to build standalone entities.
This, to me, is the opening of another big change in the media landscape. Comcast is recognizing the reality that streaming is dethroning cable and they have accepted that.
May I take a moment to wish a wonderful holiday season to MR readers all over the world. Some 52% of you come from outside the U.S. I love hearing from all of you.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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