Versant Media Group (VSNT) will start trading on January 5 after the newly formed, independent media company is separated from Comcast (CMCSA) through a tax-free pro rata spinoff. The media company will house most of NBCUniversal’s traditional cable television networks and associated digital brands, giving public investors direct exposure to a focused portfolio of linear and digital media assets that had previously been embedded within Comcast’s (CMCSA) broader conglomerate structure.
The hybrid cable-digital media company will be anchored by well-known cable channels such as CNBC, USA Network, E!, SYFY, Oxygen, Golf Channel, and other NBCUniversal cable networks, along with a digital portfolio that includes Fandango, Rotten Tomatoes, Peacock-adjacent brands like Now-branded news offerings, GolfPass/GolfNow, and youth/sports software platform SportsEngine. Ahead of the spinoff, Versant (VSNT) management emphasized that the entity will be well capitalized and conservatively leveraged at launch.
“Versant (VSNT) has a unique set of assets, a dedicated leadership team, and we are prepared to defy expectations — be innovators in the markets that we serve,” CEO Mark Lazarus said at the investor day (see the full presentation). “This is a company with a mandate to build beyond cable, in fact, beyond media, and we are ready to transform and positioning ourselves to win,” he added.
The move puts Comcast (CMCSA) firmly in the vanguard of companies looking to separate their slower-growing legacy pay TV networks from smaller (but faster-growing) streaming operations. Those networks accounted for 14 billion hours of viewed content in 2024, Lazarus noted, with 65 million households watching its networks monthly. In addition, its digital properties (including reservation systems for golf tee times and movie tickets via its Fandango/Rotten Tomatoes brands) process 140 million transactions per year. Even as plans for the spin-off were proceeding, Comcast entertained a bid for Warner Bros. Discovery (WBD) that would involve merging its NBCUniversal division with WBD’s studio operations and theme parks. That bid appears to be off, with Warner Bros. aiming for a transaction with Netflix (NFLX) and facing a hostile buyout from Paramount Skydance (PSKY).
By separating Versant (VSNT), Comcast (CMCSA) sees its equity story being simpler for investors to understand, allowing the stock to trade more directly on growth in connectivity, parks, and premium streaming. For its part, Versant (VSNT) may find it easier to consider M&A and be more flexible with cost restructuring and capital returns.
Seeking Alpha analyst WideAlpha noted that even though many skeptics may view Versant (VSNT) as a “melting ice cube”, the expected valuation of roughly $10 billion would mean a double-digit free cash flow yield and a 6X to 7X EV/EBITDA multiple. “This would be below some peers facing similar challenges, such as Fox and Paramount Skydance. Versant is also expected to start its public life with a healthy balance sheet, and as a separate entity, it is more likely to get takeover interest as consolidation continues in the industry,” read part of the breakdown from WideAlpha. It’s an undemanding valuation for some of the industry’s top brands, including CNBC, they noted. Netflix (NFLX) may deserve its premium as the streaming leader, but it’s harder to argue that Fox (FOX) (FOXA) or Paramount Skydance (PSKY) deserve a significant premium over Versant (VSNT).
The spinoff transaction is structured as a pro rata distribution of one Versant (VSNT) share for every 25 Comcast (CMCSA) shares held by shareholders on the record date. Media companies that the emergence of Versant (VSNT) could have some implications for to varying degrees include Warner Bros. Discovery (WBD), AMC Networks (AMCX), Starz Entertainment (STRZ), Fox Corporation (FOXA), Paramount Skydance (PSKY), Netflix (NFLX), Nexstar Media Group (NXST), E.W. Scripps Company (SSP), and Gray Television (GTN).
ETFs with the heaviest weighting of Comcast (CMCSA) are the Invesco S&P 500 Equal Weight Communication Services ETF (RSPC), State Street® Communication Services Select Sector SPDR ETF (XLC), and iShares U.S. Telecommunications ETF (IYZ).