NBCUniversal CEO Jeff Shell leaves behind a set of company-defining decisions
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(L-R) Michael Cavanagh, 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
As the shock wears off on the sudden departure of NBCUniversal Chief Executive Officer Jeff Shell, Comcast executives will need to make decisions on a handful of major items that will determine the company's future in the next 12 to 24 months. Shell announced he was departing the company immediately Sunday after admitting to an inappropriate relationship with an NBCUniversal employee. Mike Cavanagh, Comcast's president, will run the NBCUniversal division, though it's unclear for how long. While Cavanagh has been at Comcast since 2015, serving as the company's chief financial officer before his promotion to president in October, his background isn't running large media businesses. Cavanagh was a banker for more than 20 years before joining Comcast. Shell's sudden departure comes at a particularly crucial time for the future of the news and entertainment company. While Shell was never the ultimate decision maker at Comcast — that job falls to CEO Brian Roberts, whose family controls the company — his input and vision helped dictate the company's pathway through streaming, sports rights and acquisitions. NBCUniversal is staring at big decisions in all three of those categories in the coming months.
The Hulu decision
NBA rights
Merging with Warner Bros. Discovery
The elephant in the room with NBCUniversal is the frequent speculation in media circles that a merger with Warner Bros. Discovery could be coming in the next 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-WBD deal were to happen, Shell may not have had a role at the future 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's no question" Roberts wanted to buy WarnerMedia but didn't because of regulatory pushback. "My comment to Brian was that this is the pickle out of the jar," Malone said in 2021. "If the regulatory environment permitted, down the road, all kinds of relationships could be contemplated between this enterprise that we're creating and Brian's enterprise. I think there are many opportunities for this Discovery-[WarnerMedia] enterprise to work with NBCUniversal to develop successful businesses." It's possible a Republican presidential administration could be more welcoming to the idea of a merger. Market dynamics have also shifted since 2021, potentially helping to convince Roberts and Zaslav to attempt a merger. Both Comcast and Warner Bros. Discovery are smaller companies after losing substantial value in 2022. Given Cavanagh's background in finance, rather than operations, Roberts may signal his plan to merge NBCUniversal if keeps Cavanagh in the role rather than find an outside replacement. It may make little sense for Roberts to choose a new leader for NBCUniversal if that person will simply steer the company into a merger. WATCH: CNBC's Squawk on the Street crew share their thoughts following ouster of NBCU CEO
Source: CNBC
