(L-R) Michael Cavanagh, then-chief financial officer of Comcast, talks with Brian Roberts, chief executive officer of Comcast, as they arrive for the annual Allen & Company Sun Valley Conference, July 9, 2019 in Sun Valley, Idaho.
Drew Angerer | Getty Images
Because the shock wears off on the sudden departure of NBCUniversal Chief Executive Officer Jeff Shell, executives at NBCUniversal’s parent company, Comcast, might want to make decisions on a handful of major items that can determine the corporate’s future in the subsequent 12 to 24 months.
Shell announced he was departing the corporate immediately Sunday after admitting to an inappropriate relationship with an NBCUniversal worker. Mike Cavanagh, Comcast’s president, will run the NBCUniversal division, though it’s unclear for the way long. While Cavanagh has been at Comcast since 2015, serving as the corporate’s chief financial officer before his promotion to president in October, his background is not running large media businesses. Cavanagh was a banker for greater than 20 years before joining Comcast.
Shell’s departure comes at a very crucial time for the long run of the news and entertainment company. While Shell was never the last word decision-maker at Comcast — that job falls to CEO Brian Roberts, whose family controls the corporate — his input and vision helped dictate the corporate’s pathway through streaming, sports rights and acquisitions.
NBCUniversal is gazing big decisions in all three of those categories in the approaching months.
The Hulu decision
“Every thing is on the table,” Iger told CNBC’s David Faber in February, suggesting Disney could buy the rest of Hulu or sell its 66% stake — conceivably to Comcast.
Shell was an enormous fan of Hulu and thought it could supercharge NBCUniversal’s streaming efforts, in accordance with people accustomed to his considering. Hulu ended 2022 with 48 million subscribers, greater than doubling the number of consumers paying for NBCUniversal’s flagship streaming service, Peacock, which topped 20 million in January. Each streaming services are U.S.-based. Uniting Hulu’s ownership could allow a media company to increase the brand globally, adding tens of thousands and thousands more subscribers.
Acquiring Hulu’s 66% stake from Disney could cost Comcast greater than $20 billion. Roberts will proceed to be the last word decider on such a move. Losing NBCUniversal’s top operator may give Roberts some pause on a deal. Or, perhaps, it could spur Roberts to search out latest leadership through a big acquisition.
NBA rights
It’s unclear if NBC will actually get a shot at buying the rights, as Disney and Warner Bros. Discovery have exclusive negotiating rights with the NBA until early next yr. But when the NBA decides it wants NBC as a partner, the media company may have to pay billions per yr for the privilege. The NBA is searching for a considerable increase in current rights payments, which are $1.4 billion annually for Disney and $1.2 billion for Warner Bros. Discovery.
NBCUniversal also owns several regional sports networks, whose own long-term business is in query because the NBA and Major League Baseball rethink methods to broadcast local games amid the bankruptcy of Sinclair’s Diamond Sports Group.
Mark Lazarus was promoted to move of NBCUniversal Television and Streaming in May 2020. He has overseen NBC Sports Group for greater than a decade. Roberts and Cavanagh can proceed to depend on Lazarus and head of NBC Sports Pete Bevacqua for future media rights moves.
Merging with Warner Bros. Discovery
The elephant within the room with NBCUniversal is the frequent speculation in media circles that a merger with Warner Bros. Discovery might be coming in the subsequent two years. Warner Bros. Discovery must wait two years before completing a sale for tax purposes following AT&T’s divestiture of WarnerMedia into Discovery Communications.
If a Comcast-Warner Bros. Discovery deal were to occur, Shell may not have had a task at the long run company. Warner Bros. Discovery CEO David Zaslav could run the combined media assets.
Warner Bros. Discovery board member John Malone told CNBC in 2021 “there is not any query” Roberts desired to buy WarnerMedia but didn’t due to regulatory pushback.
“My comment to Brian was that that is the pickle out of the jar,” Malone said in 2021. “If the regulatory environment permitted, down the road, every kind of relationships might be contemplated between this enterprise that we’re creating and Brian’s enterprise. I believe there are various opportunities for this Discovery-[WarnerMedia] enterprise to work with NBCUniversal to develop successful businesses.”
It’s possible a Republican presidential administration might be more welcoming to the concept of a merger. Market dynamics have also shifted since 2021, potentially helping to persuade Roberts and Zaslav to aim a merger. Each Comcast and Warner Bros. Discovery are smaller corporations after losing substantial value in 2022.
Given Cavanagh’s background in finance, slightly than operations, Roberts may signal his plan to merge NBCUniversal if he keeps Cavanagh within the role slightly than finding an outdoor substitute. It might make little sense for Roberts to decide on a latest leader for NBCUniversal if that person will simply steer the corporate right into a merger.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
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