How MSNBC and Bravo will be affected by Comcast’s spinoff plans

On the Sunday before Election Day, NBCUniversal’s corporate synergies were in full swing.

For at least one day, the longtime public affairs show “Meet the Press” was in Rockefeller Plaza on the 30th, with host Kristen Welker harshly criticizing Sen. Raphael Warnock and Gov. Doug Burgum. .

Steve Kornacki explained the poll on an interactive “Big Board,” and MSNBC host Jen Psaki spoke for liberals during a panel discussion.

It was a synergy that might never happen again if NBCU’s parent company, Comcast, were successful in splitting the cable channel from the rest of its media assets.

The cable giant announced Wednesday that it plans to formally move forward with the proposed breakup. Under the proposed split, MSNBC, CNBC, E!, Syfy, USA, Oxygen, Golf Channel, Fandango and Rotten Tomatoes would become separate entities. It will be led by Mark Lazarus.

But the SpinCo deal comes with a number of complications, to which executives appear to have few answers at this point. Depending on what happens after the split is complete, the channel, and the entire television industry, could be restructured.

Nowhere are the questions more acute than at Comcast’s cable news channels MSNBC and CNBC. MSNBC sources described the mood within the network as “depressing,” while CNBC sources described the mood as “frustrating, but probably okay.”

It’s a dynamic that makes sense. MSNBC benefits greatly from its close relationship with NBC News, with its own talent gaining on-air exposure and many NBC anchors filling time on the cable channel. MSNBC relies on NBC News’ vast reporting capabilities and has supplemented it with its own, more opinion-based programming.

CNBC, on the other hand, has long operated with a high degree of autonomy. The company’s executive offices, newsroom and studios are located in Englewood Cliffs, N.J. (with satellite studios on the New York Stock Exchange and Nasdaq) since Cesar Conde took over NBCUniversal News Group in 2020. , CNBC resources are now available. It will be integrated into a larger news operation.

While the staff there is uncertain about what the future holds (no more discounts on theme park vacations), they are confident in their ability to execute outside of the larger NBCU corporation. CNBC began reporting on Lazarus yesterday, giving an early start to the new structure.

Mr. Lazarus met with top MSNBC talent on Wednesday, joined by MSNBC President Rashida Jones, according to a person familiar with the company. Lazarus was optimistic, but acknowledged the complexity and uncertainty of the deal, some of which will be very close to MSNBC’s identity.

Think about it: Will the channel still be called MSNBC? Can it still use the peacock emblem? Will the station terminate its financial contract with NBC News to continue reporting, or will it pursue other options? These are big questions with no clear answers, and the devil is in the details, especially at MSNBC.

In a memo to NBCUniversal staff after the deal was announced, Comcast President Mike Kavanaugh positioned the new company in the context of news, sports and entertainment. USA and Golf Channel will be home to sports with WWE, NASCAR, Premier League, golf, college basketball and Olympic rights, he wrote.

But will it really happen?

NBCUniversal holds these rights, and while it is almost certain that the two companies will work out some kind of agreement to allow these sports to continue airing on the cable channel, it remains to be seen whether Spinco will survive the spinoff. There will also be considerable long-term uncertainty. These rights will apply the next time NBCU renews or acquires its own rights.

NBC Sports President Rick Cordella said at a Sports Business Journal conference hours after the deal was made that the deal was “probably just a microcosm of our larger industry… NBCU was the first company to have a Comcast ( “When it was acquired by a cable channel,” he said. was a crown jewel, but now we see things a little differently in this fragmented media world. ”

Like Lazarus, Cordella has given few details about how the split will work, and NBC’s sports rights partners will likely want to know more.

“I can’t tell you everything about how this is going to happen, but from a sports perspective, we, our partners in cable properties like Golf Channel and USA, we intend to meet every obligation, every commitment.” to,” he added.

Notably, Golf Channel is similar to CNBC in that it operated independently in Orlando before merging with NBC Sports in 2021. Perhaps a spin-off will bring it back south.

But one sports official said the new company could become a sports player itself, expanding to seek new rights as much as possible, given the likely short lifespan of traditional NBC sports content. I guessed it.

Entertainment abounds at the new SpinCo, with USA, E!, Oxygen, and Syfy all participating at various levels. NBCU was preparing more scripted fare in the USA when the deal was announced.

But in recent years, with most of NBCU’s entertainment investments going to Peacock, the NBC broadcast network, and to a lesser extent Bravo, there’s no question that the cable channel is doing the best it can with less.

Will the new regime allow us to invest even more in entertainment? Perhaps. In addition, it becomes possible to become a buyer from a larger number of producers, which may give them selectivity. Independent companies could also likely end their own streaming deals and license their entertainment to other streaming platforms. But as NBCU’s own actions demonstrate, cable is no longer the home of entertainment. Suits was a hit in the USA, but it also became a phenomenon on Netflix. However, the company’s future spinoffs will continue on NBC and Peacock, leaving the U.S. in a bind.

The odd thing about this deal is that NBCU retains its only cable channel, Bravo.

That makes sense. Bravo has built arguably the strongest brand in its cable portfolio, with its reality shows generating significant television viewership as well as viewership for Peacock. If any brand can survive the shift to streaming internally, it’s Bravo.

But the deal raises questions about how long cable channel Bravo will last, or whether NBCU wants to move sooner to merge it with Peacock (or NBC, where Bravo-branded programming can survive).

Bravo will retain the NBC network to maintain its transportation business (more on that later), but its larger portfolio will have no cable channel sibling (the Telemundo channel will be sidelined, and that business will remain intact). .

There’s no question that NBCU’s cable channels benefited from being connected to the NBC broadcast network. When the distribution deal came up, NBC became almost mandatory, and the company had the leverage to continue carrying the remaining channels.

The deal breaks that connection, leaving SpinCo Channel to negotiate on its own without NBC’s hammer.

As S&P Global Market Intelligence analyst Scott Robson points out, Comcast has been more proactive than its competitors in the cable industry in recognizing the difficult economic conditions in which it operates.

“Comcast has been more aggressive than any other media company in shutting down its foundational cable networks for years, shutting down seven networks since 2015. As a result, Comcast is less likely to keep its cable networks independent. “It’s not surprising,” Robson said. Due to the shrinking pay TV industry, cable networks are more vulnerable to future decline than broadcast networks. ”

S&P estimates that the biggest channels like USA, Bravo, E!, MSNBC, and Syfy will reach about 60 million households next year, while others like CNBC and Oxygen will reach slightly fewer. But which channel will be the center of the spin-off? The United States? If so, how much influence will you actually have in the negotiations?

Integration is the biggest issue of all.

Comcast has no doubts about the new company’s efforts, and Cavanagh said Spinco will “play an offensive role” and act “as a potential partner and acquirer for other complementary media businesses.” I pointed out that it can be done.

Immediately, the buzz in Hollywood centered on Paramount, which is expected to have new management in the new year, and while there was a lot of interest in Paramount’s studios, streaming and CBS, enthusiasm for cable TV brands such as MTV and Comedy Central was fading. .

Independent brands like AMC Networks and Hallmark also come to mind, as does Warner Bros. Discovery’s suite of channels, but company executives appear focused on executing strategy and pursuing bigger deals. is.

Comcast’s spin would trigger big changes that aren’t yet clear, but it’s almost certain to be a much-needed rollup for the industry. The only question is who is in and who is out.