Comcast Breaks Up Again

[Mark Jeffries]

After spinning off its cable networks last year into Versant Media, the cable/Internet provider is staying with its original business and spinning off a  merger of NBCUniversal and the European satellite/streaming provider Sky:

https://www.hollywoodreporter.com/business/business-news/comcast-split-two-companies-nbcuniversal-spinoff-1236632843/

 

It seems to me (and Adam can verify or correct) that the ITV OTA network and the ITVX streamer is being taken over by Sky, with the former ITV company formed in the merger of Granada and Carlton 25-some years ago now being a programme supplier (including the long-running soaps "Coronation Street" and "Emmerdale" and the international franchises "The Voice" and "The Chase"). I would assume that the ITN news division (which produces newscasts for Channel 4 and Channel 5 along with ITV) would merge with Sky News (which produces the primary news service for commercial radio stations in the UK).

[M-D November]

So what was the point of spinning off the NBCU cable networks if Kabletown was just going to spin off NBCU anyway...?

[Kevin M. (RPCV)]

At this point, all the mergers and breakups amount to economic misdirection. Just as magicians use slight-of-hand to obfuscate, media companies are desperately trying to hide how much money they are losing, so they consolidate with one hand and combine with the other. The end result is bookkeeping that is so convoluted that they can continue with the pretense that all of this isn't balancing on a rusty nail.

[Adam Bowie]

The UK part of this interesting.

NBCUniversal will basically own NBC, Sky, Peacock and Universal. Sky is indeed buying ITV (and its streamer ITVX), but not the production arm ITV Studios which makes programmes for ITV and many others. Over the weekend there were stories in the UK that this deal is likely to complete in the next month or so, subject to regulatory approval. That's not going to be a given, since a combined Sky/ITV advertising sales outlet would control 70% of the TV market. They will argue that they're up against YouTube and TikTok and that percentage is much smaller. Sky sells advertising for Paramount owned Channel 5 and Disney in the UK, so they might have to give those deals up. The news part is more complicated. ITV only owns 40% of ITN, which makes its news. ITN also makes news for Channel 4 and Channel 5! 

Sky would also commit to buy £2bn of programming from ITV Studios - kind of important since the network needs Coronation Street, Love Island and the rest. Otherwise, they'd just be getting a slot on the EPG.

In the meantime, when Comcast bought Sky from Murdoch, they made a commitment to fund Sky News for 10 years at the existing levels with inflationary increases. That deal expires in 2028. Sky News loses money, so Comcast/NBCUniversal could bail out at that time. But if they want to get the ITV deal over the line they may need to make further commitments, especially if there's some kind of merger of ITN and Sky News.

It's interesting that the news today only mentions that Comcast will have the broadband and wireless part of the company in the US. In the UK, Sky also operates a broadband and wireless phone business. They don't break out the broadband and telephony from the TV service, but it's got to be a chunk of it. It seems like this will remain part of Sky and so within the new NBCUniversal company. 

If they were really bold, they'd merge Sky, NBC, ITV and Peacock into some global streamer. But they just don't operate TV services in most countries. They're only now in the UK, Ireland and Italy, having pulled out of Germany, Austria and Switzerland. And the US obviously. 

They surely have to scale with another business. Maybe they do indeed become a target for Netflix?

Adam

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