Commentary

Spin Zone: Inside Comcast's Head-Spinning Spinoff Plan

• by Adam Buckman , Featured Columnist, 9 hours ago

It’s the spinoff to end all spinoffs as Comcast spins off its cable networks into a company called SpinCo.

The name is so generic that it seems like an afterthought. Also, some might mispronounce it and think it rhymes with “stinko.”

Plus, it conjures related words such as “tailspin” and “spin zone.” On the latter subject, here is how Comcast spun the story in its announcement last Wednesday that it was spinning off its basic cable networks (except Bravo) into a separate entity.

“SpinCo will be an industry-leading news, sports and entertainment cable television business with a focused strategic direction,” the press release said.

“SpinCo’s stable of marquee brands will provide a diverse and differentiated content offering that will reach approximately 70 million U.S. households,” it said.

“Hope is a good thing,” wrote Andy Dufresne (Tim Robbins) to his prison friend Red (Morgan Freeman) in “The Shawshank Redemption.” 

But hope alone might not be enough for Comcast to fulfill its goal of “future growth” in the basic-cable space.

“When you look at our assets, talented management team and balance sheet strength, we are able to set these businesses up for future growth,” said Comcast Chairman and CEO Brian Roberts in a prepared statement.

“Taken together, the entirety of NBCUniversal will be on a new growth trajectory,” said Comcast President Mike Cavanaugh.

“We see a real opportunity to invest and build additional scale and I’m excited about the growth opportunities this transition will unlock,” said Mark Lazarus, currently chairman of NBCUniversal Media Group, who has been named CEO of SpinCo.

The key word from the prepared statements is “growth.” But that’s a word few in the TV business today associate with the words “basic cable.”

The NBCU cable networks that are headed to SpinCo are CNBC, E!, Golf Channel, MSNBC, Oxygen, Syfy and USA Network. The outlier is Bravo, which is staying in the parent-company fold. 

Of particular interest is the inclusion of MSNBC (featuring the weekday show “Morning Joe,” pictured above) and CNBC on this list of cable channels to be spun off.

It is one thing to jettison low-rent channels such as Oxygen and E!, which are literally gasping for oxygen. But MSNBC and CNBC are well-known brands, and news brands to boot.

Either they have been included to prop up the other channels in the SpinCo portfolio, or Comcast considers them to be on par with the other ones it is spinning off. 

The spinoff plan represents a turning point in basic cable. To the TV Blog, it represents a realization leading to a conclusion on the part of Comcast that its basic-cable properties actually have little or no potential for growth and by separating them out, they are now left to sink or swim on their own.

Growth would be great, but it is difficult to see how that can be achieved, given the headwinds everyone talks about.

Most notable among them is cord-cutting, with which millions are saying they do not want or need basic cable anymore, since streaming serves their needs better and cheaper.

In addition, these basic cable channels have been in decline for years to the point where they now seem merely as placeholders clinging to life and their channel positions.

The decline has been noted and chronicled here many times. “As one who grazes through my basic cable channels frequently, the thought often occurs to me that I am literally witnessing an industry in its death throes,” I wrote four years ago this month.

“Here’s a theory that perhaps can be applied to the whole world of basic cable at this moment in its history: Cord-cutting is a reality that shows no sign of ebbing or plateauing,” I wrote last February.

“Thus, this theory continues, the majors are keeping some of these basic channels on a kind of life support until such time that they are not viable at all.”

The cycle of decline goes like this: Content deficiencies lead to audience erosion that leads to depressed ad rates and then results in interminable commercial breaks with commercial loads that drive away even more viewers.

Non-scripted content on basic cable looks cheaper every day, and development of original scripted content on basic cable has all but come to a halt. 

SpinCo will have its hands full. Comcast says the transitioning of its cable networks into the new company will take about a year.