Comcast (CMCSA) is in the midst of remaking the structure of its business, spinning off the entertainment division it acquired from General Electric when it completed its 2013 purchase of NBCUniversal into a separate company.
While the wheels on these spin-offs have been turning for a while, the company announced its spin-off plans over the summer, and the recent success of its movie studio division, driven by the runaway hit ‘The Odyssey’, is certainly making the transition much easier.
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Comcast reported its quarterly results this week and said the upcoming spin-off is proceeding as planned.
“While there is still significant work ahead, we have a clear path to completion and remain focused on creating two companies with the strategic flexibility, financial strength, and leadership to compete and grow independently. We have tremendous confidence in the future of both companies,” Comcast co-CEO Mike Cavanagh said on the earnings call.
Comcast benefits from ‘The Odyssey’ success
The success of director Christopher Nolan’s latest film, “The Odyssey,” will create tough comps for Universal Studios next year.
The blockbuster has grossed nearly $1.9 billion worldwide since its July opening, including $625 million at the domestic box office and another $1.16 billion internationally. That success helped push the studio’s theatrical revenue 77% higher in the third quarter to $1.13 billion.
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‘The Odyssey’ is Universal’s highest-grossing film of all time, helping the movie studio become the first one to surpass $5 billion at the global box office this year. However, overall theatrical revenue decreased in the third quarter year over year “primarily due to the timing of when content was made available by our television studios,” Comcast said.
Peacock posts a profit
That television studio also helped Peacock, its streaming service, report a quarterly profit for just the second time since it launched in 2020.
Peacock recorded third-quarter EBITDA of $261 million on total revenue of $1.8 billion. The streaming platform maintained 48 million subscribers, which was flat from the previous quarter but up 17% year over year.
Peacock had record-high viewership in the quarter thanks in part to the FIFA World Cup, whose final games were broadcast on Peacock and Telemundo, which is also owned by NBCUniversal, at the start of the quarter.
Overall media revenue rose 13% year over year to $5.4 billion while the overall content and experiences unit, which includes theme parks, film and movie studios, saw a 6.5% year over year increase. However, independently, Comcast’s theme park revenue fell 4.4% year over year to $2.6 billion.
Comcast is doing the splits
Comcast’s plan to spin off the rest of its entertainment division after Versant Media Group, which owns the portfolio of cable TV networks and digital assets spun off by Comcast, started trading publicly in January.
Versant is the home of MS Now (formerly MSNBC), CNBC, Golf Channel, USA, E!, Syfy and Oxygen, as well as the websites Fandango, Rotten Tomatoes, GolfNow and Sports Engine.
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Now, Comcast expects the spin-off of NBCUniversal and Sky Media to be completed in 2027. NBCUniversal, the new separate company, will consist of Sky, Universal Film and TV Studios, NBC, Telemundo networks, Peacock, and Bravo.
Comcast expects to retain a 19.9% stake in the new company for up to one year after the spin-off is complete. Comcast shareholders will own shares in both Comcast and NBCUniversal and Cavanagh will run the new business while former Comcast CFO Michael Angelakis will become Comcast CEO.
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