The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Jennifer Saba

NEW YORK, June 29 (Reuters Breakingviews) - Thirteen years after the fictional Kabletown came to an end, its real-world model is doing the same. Comcast CMCSA.O, whose NBCUniversal aired the self-parodying sit-com “30 Rock” until its seven-season run finished in 2013, has decided to split its broadcasting and streaming business from the cable and broadband pipes. The breakup should generate a bit of value, but also lays the groundwork for more helpful deals.

Comcast boss Brian Roberts long touted the financial benefits of bundling the NBC family of networks, streaming service Peacock, a movie studio, theme parks and European pay-TV provider Sky with the utility-like television and internet services it provides. After separating a package of cable networks, including CNBC, earlier this year into the standalone Versant Media VSNT.O, it's now ready for further corporate cord-cutting.

The model is clearly broken, despite working for a while after Comcast agreed to buy NBCUniversal from General Electric in 2009. Over the past five years, the shares have tumbled 60% as competition with wireless providers grows on one side while media consolidation and the decline of traditional TV hurt the other.

There's financial logic to cleaving the company. Comcast’s cable and broadband business is expected to generate $28 billion of EBITDA in 2027, according to estimates gathered by Visible Alpha. Use the 5 times multiple at which rival Charter Communications CHTR.O trades and the enterprise is worth about $140 billion. It might even benefit from the insatiable appetite for artificial intelligence if wireless capacity gets strained.

In media, analysts expect NBCUniversal to pull in $5 billion of profit next year. Walt Disney DIS.N commands 9 times EBITDA, which suggests Comcast's entertainment division would be worth about $45 billion. Sky adds another $10 billion or so benchmarked against British broadcaster ITV. Altogether, the parts are worth nearly $200 billion, or about a fifth more than they are combined.

Buying NBCUniversal in a two-step deal, starting in 2009, remade Comcast into a more diversified company as peers were carving themselves up. Roberts opportunistically struck during a dreadful advertising market and as GE was reeling from the financial crisis. Reversing course now belatedly addresses the new industry backdrop.

Roberts at least gets ahead of any aggrieved investors who might have initiated a nasty campaign. It also creates companies with their own management teams and stocks with which to pursue acquisitions. A merger with peer Charter would make theoretical sense; expanding into video-games is another option. A standalone NBCUniversal also could be a more attractive takeover target for Netflix NFLX.O or another suitor, giving "30 Rock" fresh material for a possible reboot.

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CONTEXT NEWS

Comcast said on June 29 that it plans to separate into two publicly traded companies through a tax free spinoff of NBCUniversal and Sky, unwinding the unified strategy it began in 2009 when it agreed to buy 51% of NBCUniversal from General Electric.

Mike Cavanagh will become sole CEO of NBCUniversal after serving as Comcast co-CEO with Brian Roberts since 2022. Former CFO Michael Angelakis will return to the company as CEO of the cable and broadband holdings. Roberts, whose family controls Comcast, will continue to be active in both companies.

The separation is expected to be completed in one year and is not subject to shareholder approval. NBCUniversal will have the same dual-class share structure as Comcast, with Roberts retaining voting power of more than 33%.

Comcast will keep a 19.9% stake in NBCUniversal for up to one year after the completion of the spin.

Goldman Sachs and PJT Partners are serving as financial advisors.