Morgan Stanley To Advise Comcast On Potential Spin-Off

Comcast Corp. has decided to work with investment bank Morgan Stanley to evaluate options for its cable networks, according to Bloomberg citing people familiar with the matter, after announcing last week it’s considering divesting the business.

Morgan Stanley is helping Comcast, a cable provider and media company, study scenarios for the networks, the people said. Comcast owns cable networks including MSNBC, CNBC, E! and Bravo, among others. It hasn’t specified which ones might be split off, and it could still decide to keep them.

Comcast President Mike Cavanagh said Thursday that the media conglomerate has been deliberating whether to separate its cable networks into a new company that would go to shareholders.

The goal would be to position the new business to “take advantage of opportunities in the changing media landscape and create value for our shareholders,” Cavanagh said, without offering further details.

Comcast’s cable networks business has been in decline as consumers cancel their cable TV subscriptions, creating a drag on the stock. Separating it could help Comcast unlock a higher valuation for itself.

If separated, the business could act as a consolidator of other cable networks or draw interest itself from others. Comcast could spin off the business and combine it with other cable network businesses through a tax-friendly merger structure known as a Reverse Morris Trust, some of the people said.

A potential spinoff of its cable networks could significantly impact MSNBC, reports Cord Cutter News. Historically, MSNBC has benefited from its close relationship with NBC News, leveraging its reporting resources to provide a mix of original reporting and opinion-based programming. If Comcast proceeds with the spinoff, MSNBC might need to explore new strategies to maintain its newsgathering capabilities.

Here are a few potential paths MSNBC could take:

1. Building an Independent News Organization: This would involve creating its own team of reporters and editors, which would require substantial investment and time.
2. Negotiating a Deal with NBC News: MSNBC could continue to access NBC News’ resources through a formal agreement, potentially involving a fee.
3. Shifting Focus to Opinion-Based Programming: By relying more on opinion content, MSNBC could reduce its dependence on original reporting, though this might affect its viewership and brand identity.