(Reuters) -Comcast said on Wednesday it plans to spin off some NBCUniversal cable TV networks, as the rise of streaming prompts the media company to relinquish some of its most prized assets.
Its shares rose about 1.7% in premarket trading, after the company said it would separate its entertainment and news channels including MSNBC, CNBC, USA, Oxygen, E!, Syfy and Golf Channel.
Comcast will retain some NBC entertainment, sports and news properties, along with the Peacock streaming service, its theme parks as well as film and television studios.
“The most likely buyers of these cable channels are private equity firms or other media conglomerates,” said Emarketer senior analyst Ross Benes.
“PE would have an easier time hiding financial losses from a purchase than public companies would. PE buyers would cut costs and wrangle out what value is left of the networks, attempting to squeeze out quick profits.”
Profitability in traditional television and cable networks has been declining as consumers increasingly shift to streaming services such as Netflix, leaving media firms to explore other options for their legacy businesses.
Paramount Global – home to cable television networks Comedy Central, Nickelodeon and MTV – agreed to merge with streaming-era upstart Skydance Media earlier this year.
Mark Lazarus, who currently serves as the chairman of NBCUniversal’s media group, will lead the new venture as CEO, while Anand Kini, who served as CFO of NBCUniversal, will be the operating chief and finance head of the new company.
The spin-off is expected to take a year to complete and the new venture will have an ownership structure that mirrors that of Comcast.
(Reporting by Zaheer Kachwala, Akash Sriam and Jaspreet Singh in Bengaluru; Editing by Pooja Desai and Devika Syamnath)
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