The Cable TV Business Is Dying. Is It Worth Saving?

Alex Weprin
5 min read

Comcast Corp. opened its latest earnings call with a surprise announcement: The Brian Roberts-run media giant was weighing whether to spin out its cable TV channels into a separate “well-capitalized company” that “would position them to take advantage of opportunities in the changing media landscape.”

Was Comcast testing the waters? Sure. Comcast president Mike Cavanagh made it clear that the company was just beginning to look into the idea, and was far from making a formal decision.

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But one thing became clear: Wall Street seemed to like it. Comcast shares surged when the market opened, and closed up 4 percent on an otherwise down day for Wall Street. And Comcast’s news seemed to make waves across the entire industry, with Warner Bros. Discovery shares also surging, and Disney and Paramount also inching up. In fact, on a day when almost the entire market was down, the media and telecom segments were up.

A spinoff “would be a very welcome development,” wrote MoffettNathanson analyst Craig Moffett on Oct. 31. “Investors have yearned for exactly this, or at least something close to it, for years.”

Why the enthusiasm? Comcast — which has a larger exposure to the cable TV business and subsequently lost more pay-TV subscribers than its rivals over the past year — may be a harbinger of the future, a world where the many disparate cable channels, now unwelcome to the balance sheets of the companies that own them, could find a home where they are the center of attention, and would have more freedom and flexibility to make strategic moves.

Perhaps most significantly, a spinoff company could become a land of misfit networks, a place where unwanted cable channels could find a place to belong, or at least strength in numbers. Paramount Global, for example, has a slew of well-known cable brands like MTV, Comedy Central and Nickelodeon, but the incoming owner Skydance appears to be laser-focused on streaming and broadcast.

Warner Bros. Discovery has a strong cable portfolio that includes TBS, TNT, CNN, Food Network, HGTV and Cartoon Network, but had to take a more than $9 billion impairment charge connected to its channels as their value declined.

And there remain independent cable-centric companies, attempting to navigate the waters as best they can, who may find joining with a larger firm benefits them. AMC Networks, which owns AMC, IFC and BBC America is one, A+E Networks (jointly owned by Disney and Hearst) is another, with A&E, History and Lifetime among its brands. Hallmark Channel, owned by the greeting card giant, is also a major independent player.

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