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Is Comcast's cable spinoff a buyer or a seller?

    Comcast is cutting most cable channels. Will the new spin-off be hunter or prey?

    The media giant last week put an optimistic spin on its effort to shed what Wall Street sees as an albatross — the bulk of NBCUniversal's cable networks, whose revenue growth has been hampered by the cord-cutting revolution.

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    Now Comcast executives see an opportunity to push back. They may not be able to reverse the migration of former cable subscribers to streaming, but maybe – just maybe – they can gain a larger audience overall with a spinoff they can add to over time. The plan, said Comcast President Mike Cavanagh, leaves the company “taking offense in a changing media landscape.”

    This new “SpinCo,” which will take about a year to separate from the rest of NBCU, will house basic cable companies MSNBC, CNBC, USA Network, Oxygen, E!, Syfy and Golf Channel. It also includes digital properties Fandango and Rotten Tomatoes, golf course booking service GolfNow and youth sports platform SportsEngine.

    Mark Lazarus, the NBCU boss who will serve as CEO of the new company, has already suggested that SpinCo could try to acquire a TV station group or sports entities, according to two people familiar with his meeting with MSNBC staff. “We see a real opportunity to invest and build additional scale, and I am excited about the growth opportunities this transition will provide,” Lazarus said in announcing the deal.

    But there's another possible outcome: A private equity firm or strategic buyer could take a chance and try to do the same thing Comcast wants. After all, the cable networks will continue to generate money in the near future, thanks to the existing cable transport contracts. The long-term prospects for linear cable are quite bleak, but there are predictable cash flows that can be leveraged for at least a few more years.

    “Once they're independent, we can see [private equity] companies interested in acquiring Comcast's SpinCo across the cable networks,” said Howard Gutman, private equity strategy and coverage leader at MorganFranklin Consulting. “This is an opportunity for Comcast to look at itself and say, 'Some assets may not be a priority for me, but could be a priority for a new owner.'”

    That's not the future Comcast is publicly considering. During the MSNBC meeting, Lazarus described the new company as a “well-funded start-up.” It won't be saddled with the enormous debt burden of rivals like Warner Bros. Discovery and Paramount Global. According to Comcast, SpinCo will have a “well-capitalized balance sheet with strong credit metrics.”