-
Get involved.
We want your input!
Apply for Membership and join the conversations about everything related to broadcasting.
After we receive your registration, a moderator will review it. After your registration is approved, you will be permitted to post.
If you use a disposable or false email address, your registration will be rejected.
After your membership is approved, please take a minute to tell us a little bit about yourself.
https://www.radiodiscussions.com/forums/introduce-yourself.1088/
Thanks in advance and have fun!
RadioDiscussions Administrators
Comcast Exploring Spinoff of NBCU Cable Networks Into New Company
- Thread starter Joey1986
- Start date
Here's what they're saying
Based on my experience, anytime they talk about creating "value for shareholders," that's code for "we can't make money with it anymore." Any shareholders who end up with this stock would be wise to sell immediately. My favorite example is Disney shareholders who got stuck with shares of Citadel.
Based on my experience, anytime they talk about creating "value for shareholders," that's code for "we can't make money with it anymore." Any shareholders who end up with this stock would be wise to sell immediately. My favorite example is Disney shareholders who got stuck with shares of Citadel.
Here’s a better written article from Bloomberg:
www.bloomberg.com
The King of Cable No Longer Wants to Own Cable Networks
Comcast will explore spinning off its cable networks. It’s the opening step in restructuring of one of the world’s largest media companies.
www.bloomberg.com
I agree. Complicated situation. Everybody wants to get out of 24/7 linear networks, whether its RSNs, cable networks, TV networks, or radio stations. There's too much expense in 24/7, especially when most people only watch for a few hours, and advertising revenue is declining. It's kind of like owning a building. When you own a building, you pay for that building whether you live there or not, whether it makes money or not. You pay the taxes, you pay the maintenance, and you pay any costs. That's the kind of thing that's easier to lease.
On the other hand, what's the use in creating content if you have no place to put it?
Comcast's linear networks apparently have positive cash flow. I doubt it will be a "reverse Morris trust" type of deal because I doubt there is a market for media debt. A spin-off is the logical move. The strategy is a little off in my opinion. I would keep the linear networks with their positive cash flow until the streaming stuff becmes profitable. Cash is King.
Whether you agree or not with their business model or their programming. K love always has the cash to buy something when a really good opportunity comes along.
Whether you agree or not with their business model or their programming. K love always has the cash to buy something when a really good opportunity comes along.
K.M. Richards
Program Director, The Eighties Channel™
For the moment, anyway. As has been previously stated, that has been declining as more people "cut the cord".
Here in the San Fernando Valley, the cable system is Charter (d/b/a Spectrum). I have them for broadband but haven't subscribed to their video services since long before the merger with Time Warner Cable back in 2016, which itself preceded the multi-market system swap between Comcast and TWC a couple of years earlier.
These days, Spectrum's website lets you choose which services you want to bundle. "TV Select" is third among the four choices; the top two are internet and mobile. The video option is the most expensive -- more than the first two combined -- which causes one to suspect that they are now deliberately pricing themselves out of that market.
And ... why not? It seems that every other minute we read about one network or another demanding either higher retransmission fees for their terrestrial stations, requiring carriage of their linear cable networks as a condition for the TV stations' carriage, or both. All of this makes it a lot more expensive to run a cable system these days; now multiply that by the number of systems needed to operate in 41 states encompassing 57 million households and you can see what the biggest expense is for them.
Now, consider the fact that the video service has to take away some of the bandwidth used for internet broadband service, and you can see how online has completely changed the balance in the past decade or so.
So here's the scenario Comcast faces ... their stable of linear networks has declining viewership, and that's largely due to a decrease in subscribers not only to their own systems but for the other systems carrying their networks. Do they spin off the networks and let them spiral downward while they restructure to be more broadband provider than video provider, or do they keep the status quo and run the entirely likely risk of the whole business model collapsing once the cord cutting reaches a point where it's all downhill from there, revenue-wise?
K-Love should buy the Hallmark Channel. It fits their mindset.
They way I understand the rumors, they are going to to a stock issuing deal. Comcast will not get a big pile of cash. If these operations quit producing positive cash shut them down an get a tax write off.
BTW they are going to keep their OTA broadcasting networks for now which is kinda interesting.
BTW they are going to keep their OTA broadcasting networks for now which is kinda interesting.
Anyone (and I'm not saying you are, @secondchoice) who is confused by that thinking should do a bit of research on the AT&T breakup & spinoff back in 1984. This was a consequence of the settlement with DOJ a couple of years earlier, after the Justice Dept sued AT&T under the Sherman Antitrust Act for restraint of trade. AT&T chose to spin off their seven "slow-growth" baby Bell companies, like Southern New England Telephone and New York Telephone (which became NYNEX), New Jersey Bell and the other mid-atlantic operating companies which became Bell Atlantic (those two eventually merging, and in turn merging with GT&E to become Verizon. And then BellSouth, Southwestern Bell and Pacific Bell, all of which were initially independent but eventually merged to become the "new" AT&T. There was also a baby Bell out of Chicago, whose name I'm blanking on, but evolved into CenturyLink.
AT&T decided to keep the "fast growth" businesses like Bell Labs, Western Electric, Long Lines and NCR, which they'd acquired a few years earlier so they could be in the computer business.
Well, the slow-growth businesses ran rings around the fast-growth ones in terms of cast flow and profitability, since the fast growth businesses had an insatiable appetite for more capital. The slow-growth businesses recombined, moved into cellular as that became promising, and eventually acquired whatever subsidiary businesses didn't get sold off to some other third-party -- for example, Western Electric, which designed phones and switching equipment, was spun off to form Lucent after merging with French telecomm Alcatel. Southwestern Bell acquired Long Lines (which had been renamed something else, but was still the national interconnecting network, which also interfaced with the networks of other countries' telecomms), NCR went somewhere else, and what was left ended up going with one or the other mega-Baby Bell.
Slow and steady won the race. And to bring this home, what I'm reading about the linear broadcast networks and the cable networks not being profitable enough, fast-growing enough, sexy enough, or having enough sizzle, and the desire to spin them off onto shareholders or private equity firms has dredged up all this ancient history, because those who refuse to learn from history are doomed to repeat it.
K.M. Richards
Program Director, The Eighties Channel™
Ameritech, and it is not the Baby Bell that became CenturyLink. That was USWest.
Southwestern Bell and Pacific Telesis Group was the first Baby Bell merger, into SBC, in 1997. Ameritech was merged into SBC in 1999.
The real killer for AT&T was that they had projected a long-term profitability from long distance and then was challenged first by MCI, Sprint, Worldcom and others, and then by a whole bunch of "10+++" on-demand LD carriers. The final blow came when wireless was able to include unlimited domestic long distance which, when coupled with residential landline use being abandoned by more and more customers in favor of wireless, left AT&T with little LD business left other than businesses (and they, too, were always on the lookout for cheaper alternatives).
By the time SBC bought AT&T in 2005, it was worth $16 billion. That was less than half its value at the time of the divestiture.
BellSouth was acquired by the "new" AT&T about a year later; ironically, they had been talking merger with AT&T about a year before SBC stepped in.
What radio people often overlook in their discussion about the Telecommunications Act of 1996 is that the real result wasn't radio deregulation, but telecom deregulation that allowed the baby bells to remerge and become bigger and more powerful than they had been before the AT&T breakup. They are able to buy and own spectrum, something broadcasting has never been allowed to do.
You are correct, thanks for the correction.
Ditto.
Most of what you wrote is true, but I have to disagree on one of your points, K.M. The vivisection of AT&T happened way earlier than the point where distance and/or time stopped being the profit determinants in long distance telephony. As you said, SBC bought AT&T in 2005 (trusting your word on the date, since it's too late to verify for myself). Steve Jobs only introduced the very first iPhone in 2007. That was the inflection point when "unlimited" started being an option. Prior to that, our plans largely were for bundles of minutes per month on simpler devices, harder to use phones, with onerous charges for going over whatever allotments were in the bundle we were paying for.
The closest word I can muster for the culture of SBC is rapacious.
K.M. Richards
Program Director, The Eighties Channel™
Sorry, but I have to disagree on a technicality. Even when we had those bundles of minutes, they included domestic long distance at no additional charge per minute. (I remember this well since I had service with Cingular Wireless, using a Nokia phone, starting in 2002 ... five years before the iPhone.)
I will grant you that plans with unlimited talk minutes came much later, but cellular did not require a specific long distance carrier, as did landlines. A minute was a minute, regardless of where in the domestic U.S. you called. Landlines actually still require a long distance carrier if they are still on the copper wire network; VoIP "landlines" also have unlimited domestic long distance.
I know all about the AT&T break-up. I worked for Western Electric / Lucent which was spun off from AT&T. Fast growing until mismanaged. Lucent ended up being owned by Nokia. Thankful to be vested in the Union Retirement fund. The guys that bought Lucent stock lost big-time.
One of the first rules of economic survival should be: Never buy stock in the company you work at volunteeringly. You usually get some in your 401k which is OK. Don't put your contribution in your employer's stock. One my last assignments at Lucent was at a MCI / World com switching center after their bankruptcy. It was the site's manager's last day. He was depressed. He had no job and no retirement because he had been advised to put everything into WorldCom stock.
K.M. Richards
Program Director, The Eighties Channel™
I briefly worked at Pacific Bell while still consulting on the side, starting not long after the merger with Southwestern Bell. Was a service representative in the Residence Service Center (and one of about a dozen reps in our office who were designated to handle escalations, because we knew more than the actual managers and were actually less likely to get the company in trouble; kept me off the incoming call queue two out of the five days in a workweek ... and I always held that position if I worked Saturdays because the managers considered me to be one of the best at it). I was there when we added Ameritech to the "family" and then started calling ourselves "SBC California", and I was there when we got the authorization to offer in-state long distance in addition to the existing "local toll" which was everything non-local calling area but in-LATA, which was assigned to the Baby Bells at the divestiture. Left a little after four years' service, right before the "customer service" aspect of the job started to disappear.
And that's also why I had Cingular as my wireless company. Employee concession. (Same goes for my original DSL line, which was grandfathered in as a static IP for many years after the shift to dynamic IP ... and as an employee I got free installation.)
Never actually owned any SBC stock, although at one point we were all given stock options ... which none of us got to exercise because the stock price never got to the threshold where those were applicable.
Northwestern Bell was the actual Bell spinoff. Which became US West, then Qwest, then CenturyLink.
I believe you're right, thanks. Wasn't Pacific Northwest Bell in there too, handling most of Washington and Oregon? I recall having PNW Bell when I lived in the Seattle-Tacoma region in the early '80s, just before the AT&T breakup.
Something is about to happen:
And:
And:
"Notably, the plan calls for MSNBC and CNBC to be cleaved off from NBC News."
The bad news there is that NBC News gains value from its reporters appearing on the cable channels. So unless NBC News can find billable time on the TV network, there may have to be staff cuts. Shows like Dateline and Meet The Press belong to NBC News. In that same way, NBC Sports gains value from sharing its talent with the Golf Channel. However, they seem to be doing less golf.
The bad news there is that NBC News gains value from its reporters appearing on the cable channels. So unless NBC News can find billable time on the TV network, there may have to be staff cuts. Shows like Dateline and Meet The Press belong to NBC News. In that same way, NBC Sports gains value from sharing its talent with the Golf Channel. However, they seem to be doing less golf.
par for the course
