The once-dominant cable TV industry is rapidly becoming a financial albatross for major media conglomerates like Paramount Global, Warner Bros. Discovery (WBD), and NBCUniversal, as cord-cutting and shifting viewer habits erode their profitability. These companies, built on the strength of linear television, are now grappling with declining ad revenues and audience fragmentation, forcing them to consider drastic measures to offload their struggling cable networks. Recent moves by NBCUniversal and reportedly WBD to separate their linear TV assets into standalone entities, alongside Paramount’s anticipated network cuts post-merger with Skydance Media, signal a broader industry pivot away from cable toward streaming and studio operations. The success of Lionsgate’s spinoff of Starz offers a potential blueprint, highlighting how shedding cable assets can restore profitability.
The cable TV business, once a cash cow, is crumbling under the weight of cord-cutting and competition from streaming giants like Netflix, Amazon, and Apple. In Q2 2024, WBD reported a staggering $9.1 billion impairment charge on its TV networks, acknowledging the plummeting value of channels like CNN, TNT, and HGTV as audiences and ad dollars shift to digital platforms. Paramount, with networks like MTV, VH1, and Comedy Central, and NBCUniversal, with Bravo, E!, and USA, face similar challenges. U.S. cable ad revenues are projected to decline 4% in 2024 and 3% in 2025, falling below $20 billion by 2026—a level not seen since 2007. This erosion has left these companies struggling to compete with tech giants boasting larger balance sheets, pushing them to rethink their business models.
NBCUniversal has taken a proactive step by announcing plans to spin off most of its cable networks—excluding Bravo—into a standalone company dubbed “SpinCo” by mid-2025. This move aims to uncouple Peacock and NBCU’s sports properties from the declining economics of cable, potentially positioning the new entity for mergers or acquisitions. Similarly, WBD is restructuring to separate its Global Linear Networks, including Discovery Channel and CNN, from its streaming (Max) and studio divisions, with completion expected by mid-2025. It is expected that WBD’s cable assets could be a spun off soon after the internal split is finished. Paramount, meanwhile, is expected to cut networks or even spin off its networks following its pending merger with Skydance Media, aiming to streamline operations and bolster Paramount+’s profitability.
Lionsgate’s recent success serves as a compelling case study. After spinning off Starz into a separate entity, Lionsgate returned to profitability, freed from the drag of its cable network’s declining revenues. This move has fueled speculation that Paramount, WBD, and NBCUniversal could follow suit, either by selling off networks or creating standalone companies to offload their financial burdens. However, challenges remain. WBD’s $34.6 billion debt load complicates any spinoff, as linear networks still generate cash flow critical for debt repayment. Likewise, NBCUniversal faces questions about whether spinning off MSNBC and CNBC could weaken its news operations.
The decline of cable TV is forcing media giants to confront a harsh reality: their legacy networks, once industry cornerstones, are now liabilities. As Paramount, WBD, and NBCUniversal race to shed these assets, the industry braces for a wave of mergers, sales, or spinoffs, with the goal of surviving in a streaming-dominated landscape. The path forward is uncertain, but the message is clear—cable’s golden era is over, and these companies must adapt or risk further financial strain.
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