Comcast to spin off Sky and NBCUniversal into separate company

Key Points

Comcast has announced plans to separate into two separate publicly traded companies.
The split would spin off NBCUniversal and Sky into a new independent media business.
Sky, which Comcast bought for £30 billion in 2018, would move into the standalone NBCUniversal.
The separation is expected to complete in about one year, subject to board, regulatory and financing approvals.

Comcast, the US cable giant that bought Sky for £30 billion in 2018, has announced plans to break itself into two separate publicly traded companies, a move that will fold Sky into a newly independent media business.

The Philadelphia-based group said on Monday (29 June) that it intends to split its media and technology operations through what it called a “tax-free spin-off” of NBCUniversal and Sky. Comcast shareholders would end up owning shares in both companies once the separation completes.

The split would carve the business into two:

NBCUniversal: The media and entertainment arm, taking in Universal theme parks, the Universal film and television studios, NBC, Telemundo, Peacock, Bravo and Sky.
Comcast: The broadband, wireless and entertainment platform business, which serves more than 65 million homes and businesses across the US.

Sky, Comcast’s European media business and one of the UK’s largest broadband and pay-TV providers, would sit inside the new NBCUniversal.

Sky’s new home

Comcast won Sky in a 2018 bidding war, outgunning 21st Century Fox to take control of the pan-European TV and broadband operator.

Under the proposed spin-off, Sky would move out from under the wider Comcast group and become part of the standalone NBCUniversal.

The separation comes with a reshuffle at the top:

Michael Angelakis, Comcast’s former Chief Financial Officer, would return as Chief Executive Officer of Comcast, joining as a Strategic Advisor in the interim.
Brian L. Roberts, Chairman and Co-Chief Executive Officer of Comcast Corporation, would stay involved in the leadership of both companies.
Mike Cavanagh, currently Co-Chief Executive Officer, would become Chief Executive Officer of NBCUniversal.

The deal in numbers

Timeline: completion is expected in about one year, via a tax-free spin-off to Comcast shareholders.
Conditions: the deal needs final board approval, tax opinions, regulatory approvals and completed financing.
Share structure: NBCUniversal would carry the same dual-class share structure as Comcast.
Retained stake: Comcast expects to keep up to 19.9% of NBCUniversal for up to a year, then sell it down over time in a “tax-efficient manner”.
Advisers: Goldman Sachs and PJT Partners are acting as financial advisers, with Davis Polk & Wardwell as legal counsel.

Chairman Brian Roberts said the transaction would reshape how each business operates. “The transaction we are announcing will unlock a more entrepreneurial management approach and open up a multitude of new opportunities for each business,” he said.

Comcast cautioned that there is no guarantee the split goes ahead, noting there “can be no assurance that the proposed transaction will be completed”. The company will set out the plans to investors on a call at 8:30 AM Eastern Time.