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Nikolas Kokovlis | Nurphoto | Getty Images Comcast shares posted modest gains Wednesday after the company announced its plan to spin off all of NBCUniversal’s cable networks — except Bravo — into a separately publicly traded entity. Investors’ initial shrug at the proposed transaction underscores the uncertainty of the maneuver. The hope for Comcast is that by shedding declining assets, the company’s shares will rise. Cable networks are still profitable, but they’re hemorrhaging subscribers and revenue every year as Americans cancel traditional pay TV for streaming services. That may be an anchor on Comcast’s shares. Wall Street typically doesn’t like assets with slumping revenue and profit. Still, there’s plenty of uncertainty around the spinoff. It’s unclear if Comcast investors will care that much. The NBCUniversal cable networks are relatively small assets, generating about $7 billion in revenue over the 12 months ended Sept. 30, according to a Comcast news release. For comparison, the rest of Comcast took in about $116 billion in revenue. It’s also unclear if the spun-off company will flourish as a publicly traded entity. If Comcast is shedding cable networks because Wall Street doesn’t like them, why would shareholders want a company that consists of declining assets? There’s a reason why Disney decided not to spin its cable assets. The company considered it and ultimately decided the earnings lost from spinning profitable networks would trump any potential multiple expansion from a spin. Still, Disney’s cable networks, including FX and Disney Channel, are more integrated with its streaming platforms than NBCUniversal’s cable networks are with Peacock, the company’s subscription streaming service. The new company, temporarily called “SpinCo,” will generate cash and could pay a healthy dividend to shareholders looking to invest in declining cash assets. But that’s usually more of a private equity strategy. That may ultimately be…

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Filed under: News - @ November 20, 2024 9:28 pm