Since Sunday’s abrupt ouster of NBCUniversal CEO Jeff Shell, the company’s (provisional) successor has begun to get used to the job.
Acting replacement for Mr. Shell, Mike Cavanagh, the president of Comcast, NBCUniversal’s parent company, was dispatched from Philadelphia this week to NBCUniversal’s headquarters at 30 Rockefeller Plaza to meet with dozens of top executives. Mr. Cavanagh has also visited the set of the “Today” show, contacted news anchors such as Lester Holt and met with overnight hosts Jimmy Fallon and Seth Meyers.
But whether Mr. Whether Cavanagh takes the position permanently, or whether Comcast eventually chooses someone else for the position, the new leader will be in charge of a company that has been subject to constant rumor and speculation about its future direction, including questions such as:
Will Brian Roberts, Comcast’s CEO, combine NBCUniversal with another company, an option he’s explored before?
Will Mr. Roberts seek a sale or full acquisition of the streaming service Hulu, which NBCUniversal co-owns with Disney?
And will the NBC broadcast network give up an hour of its primetime lineup and transfer it to local affiliates, or begin negotiations for broadcast rights for the National Basketball Association?
NBCUniversal is far from in trouble. It is home to legendary institutions such as ‘Saturday Night Live’ and ‘Today’, as well as lucrative franchises such as ‘Despicable Me’ and ‘The Real Housewives’. It generated $39 billion in revenue last year, up 14 percent from the year before.
But the company also owns several cable networks like USA and Bravo that bleed viewers. The streaming service, Peacock, is growing fast but still has far fewer subscribers than many of its competitors and is expected to lose $3 billion this year.
These issues, which had been lurking for months, came to the fore again after the sudden departure of Mr. Shell. Comcast announced on Sunday that Mr. Shell is leaving the company after an investigation into a complaint about ‘inappropriate behaviour’.
His departure came after Hadley Gamble, a senior international correspondent at CNBC, filed an internal complaint alleging sexual harassment and gender discrimination, according to her attorney, Suzanne McKie. Comcast executives began an investigation after Ms. Gamble filed the complaint in late March. On Monday, the company said in a filing that Mr Shell had been fired after an investigation confirmed the sexual harassment allegations.
Mr Roberts and Mr Cavanagh met with Mr Shell at the office of a Philadelphia law firm on Friday and told Mr Shell that he was being fired, according to two people with knowledge of the internal discussions who were not authorized to speak publicly to speak .
Mr. Shell was shocked by the sudden turn of events. He had met with lawmakers in Washington, DC, in the days leading up to his resignation, and made plans to attend the White House Correspondents’ Association dinner on Saturday, according to two people familiar with the matter. He has hired a high-profile crisis communications expert, Risa Heller, and a well-known lawyer.
Mr Shell declined to comment on the circumstances of his departure but said in a statement that he was “deeply upset by how much pain and shame I have caused my family”.
“I’m just focused on making it right,” said Mr. Shell.
Comcast is still investigating elements of Ms. Gamble’s sexual discrimination complaint, according to two people familiar with the investigation.
Comcast declined to comment on the investigation. Regarding the future of Comcast’s leadership, a New York Times spokeswoman referred to comments made by Mr. Roberts during Thursday’s first quarterly interview, in which Mr. Cavanagh was called “a fantastic manager and operator”.
Mr. Roberts has tried to reassure investors since Mr. Shell’s departure. On Thursday’s earnings call, he made a brief statement in support of Mr. Cavanagh and NBCUniversal executives. He praised NBCUniversal’s bank of veteran leaders and said Mr. Cavanagh would “take the helm” of the company while remaining president of Comcast after a “difficult moment.”
Comcast’s share price rose about 10 percent after the company’s earnings call on Thursday.
As a show of support, Mr. Roberts joins Mr. Cavanagh in New York for the NBCUniversal Executive Committee meeting, which Mr. Shell led, according to three people with knowledge of the meeting. At the meeting, Mr. Cavanagh assured the assembled leaders that he would be there in the near future. Next week Mr. Cavanagh is expected to leave for Los Angeles to meet with West Coast executives.
There is consensus among executives at NBCUniversal that Mr. Shell’s departure will not have a major impact on the company’s TV, film and news assets any time soon. The main decisions of Mr. Shell needed approval from Mr. Cavanagh and Mr. Roberts, who have the final say on the major issues facing the company. “I don’t think the company will miss a beat,” said Mr. Cavanagh during the earnings call.
Although Mr. Cavanagh has taken the reins, he’s unlikely to relinquish responsibilities for the wider Comcast empire, which includes cable and wireless companies.
Mr Cavanagh is widely regarded as the most likely internal candidate to succeed Mr Roberts. A full-time job with just NBCUniversal would be a demotion in some ways. He is the only president in company history who does not belong to the Roberts family, which controls Comcast.
Still, some executives at NBCUniversal think the media assets need a dedicated leader. There are too many decisions to be made in a wide variety of businesses — including theme parks, movie studios, and TV shows — as well as more existential decisions to make it everyone’s part-time job.
Mr. Cavanagh believes Comcast has a stronger hand than many of its media industry competitors, including Disney and Warner Bros. Discovery. Profits from Comcast’s broadband and wireless businesses are somewhat shielding the company from the ad sales slump that is affecting many of its peers, giving it cash to invest in streaming.
And NBCUniversal’s movie studios and theme parks are booming, with recent bright spots like the opening of “Super Nintendo World” at Universal Studios and the release of “The Super Mario Bros. Movie,” which was a box office hit. Comcast said Thursday that its first-quarter earnings rose slightly despite a drop in ad revenue and slower growth in its broadband business.
Speculation that Mr. Roberts and Mr. Cavanagh could spin off NBCUniversal has been swirling for months, fueled by reports that they considered merging the company with video game studio Electronic Arts last year. With many of NBCUniversal’s rivals teaming up to bolster their streaming business, some analysts have speculated that Mr. Roberts and Mr. Cavanagh are on the hunt for another big deal.
A potential target being discussed by analysts is Warner Bros. Discovery, the newly minted media behemoth formed by the merger of HBO-owned WarnerMedia and the Warner Bros. movie studio – and Discovery, owner of cable networks such as HGTV and TLC.
Craig Moffett, a senior executive at research firm SVB MoffettNathanson, said such a deal could give the combined company enough weight to pay for whatever movies and TV shows would gain enough subscribers to make the service profitable. “But most Comcast investors hate that idea,” he added.
“I think Mike will inevitably make his mark on the company,” said Mr. Moffett, “and in this case that inevitably means a role for M&A, or divestitures.”
