(LR) Michael Cavanagh, Comcast’s then-CFO, talks to Brian Roberts, Comcast’s CEO, as they arrive at the Allen & Company Sun Valley Annual Conference, July 9, 2019 in Sun Valley, Idaho.
Drew Anger | Getty Images
As the shock wears off after the abrupt departure of NBCUniversal CEO Jeff Shell, the directors of NBCUniversal’s parent company, Comcastmay have to make decisions on several essential issues that will determine the way forward for the company in the next 12 to 24 months.
Shell announced it was leaving the company immediately Sunday after admitting to having an inappropriate relationship with an NBCUniversal worker. Mike Cavanagh, president of Comcast, will head the NBCUniversal division, though it’s unclear for the way long. While Cavanagh has been with Comcast since 2015, serving as the company’s chief financial officer before his promotion to president in October his experience isn’t in running large media firms. Cavanagh was a banker over 20 years before joining Comcast.
Shell’s departure comes at a very crucial time for the way forward for the news and entertainment company. While Shell was never the final decision maker at Comcast – that job falls to CEO Brian Roberts, whose family controls the company – his input and vision have helped dictate the company’s path through streaming, sports rights and acquisitions.
NBCUniversal awaits major decisions in all three categories in the coming months.
Hulu’s decision
“All the pieces is on the table,” Iger told CNBC’s David Faber in February, hinting Disney could buy the remainder of Hulu or sell its 66% stake – possibly to Comcast.
Shell was an enormous fan of Hulu and believed that, in response to people accustomed to his pondering, it could speed up NBCUniversal’s streaming efforts. Hulu ended 2022 48 million subscribersgreater than twice variety of paying customers for NBCUniversal’s flagship streaming service, Peacock, which surpassed 20 million in January. Each streaming services are based in the US. Unifying Hulu’s ownership could allow the media company to expand its brand globally, adding tens of hundreds of thousands of latest subscribers.
Acquiring 66% of Hulu from Disney could cost Comcast over $20 billion. Roberts will still be the final decision maker on such a move. The lack of top operator NBCUniversal could put Roberts on hold on a deal. Or perhaps it could encourage Roberts to search out latest leadership through a significant acquisition.
NBA law
It’s unclear if NBC will actually try to purchase the rights as Disney and Discovery Warner Bros they’ve exclusive negotiating rights with the NBA until early next 12 months. But when the NBA decides it wants NBC as a partner, the media company may have to pay billions a 12 months for the privilege. The NBA is searching for a big increase in ongoing rights payments that are $1.4 billion a 12 months for Disney and $1.2 billion for Warner Bros. discovery.
NBCUniversal also owns several regional sports networks whose long-term operations are in danger as the NBA and Major League Baseball consider the best way to broadcast local games in the wake of Sinclair’s Diamond Sports Group bankruptcy.
Mark Lazarus was promoted to move of NBCUniversal Television and Streaming in May 2020. He has oversaw the NBC Sports Group for over a decade. Roberts and Cavanagh can proceed to depend on Lazarus and NBC Sports chief Pete Bevacqua for future media rights moves.
Merger with Warner Bros. discovery
Elephant in the room with NBCUniversal is a frequent speculation in media circles with which the merger Discovery Warner Bros may appear in the next two years. Warner Bros. Discovery must wait two years before finalizing the sale for tax purposes AT&T’sale of WarnerMedia to Discovery Communications.
If a Comcast-Warner Bros. Discovery, Shell might haven’t any role in the future company. Warner Bros. CEO Discovery, David Zaslav, could manage the combined media assets.
Warner Bros. board member Discovery’s John Malone told CNBC in 2021 “there is no doubt” that Roberts desired to buy WarnerMedia, but didn’t achieve this as a consequence of regulatory objections.
“My comment to Brian was that that is pickle from a jar,” Malone said in 2021. “If the regulatory environment allowed for it, all styles of relationships might be considered in the future between this business we’re creating and Brian’s business. I believe there are numerous possibilities for this Discovery-[WarnerMedia] enterprises to partner with NBCUniversal to develop successful businesses.”
It is feasible that a Republican presidential administration can be more receptive to the idea of a merger. Market dynamics have also modified since 2021, potentially helping persuade Roberts and Zaslav to try a merger. Each Comcast and Warner Bros. Discovery is smaller firms after losing significant value in 2022.
Given Cavanagh’s background in finance quite than operations, Roberts could signal his plan to merge NBCUniversal if he keeps Cavanagh in that position quite than looking for an outdoor alternative. Roberts’s choice of a latest leader for NBCUniversal may not make sense if that person simply leads the company right into a merger.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
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