As Comcast manages through the shocking and abrupt exit of NBCUniversal CEO Jeff Shell, the company has put senior exec Mike Cavanagh at the controls on an interim basis.
Cavanagh, who was promoted last October to president of Comcast, will play a central role in guiding the executive changeover and trying to keep NBCU on course. Although well-known and respected in corporate and financial circles, the Philadelphia-based exec has a much lower profile in Hollywood.
The unexpected new duties are landing on Cavanagh’s plate just months after he earned an important vote of confidence from CEO Brian Roberts and the company’s board of directors. His promotion from CFO to president made him the first person to hold the title outside of the Roberts family, and along with the new title came a contract extension through 2027.
Cavanagh joined Comcast as CFO in 2015, after working for 20 years in financial services, including stints at JPMorgan Chase and the Carlyle Group.
Promoting from within has been a hallmark at Comcast more than at many media companies, and the company has a bench of candidates who are expected to get a look. A person familiar with the internal deliberations, however, emphasized to Deadline that a formal search process has not yet been initiated. Cavanagh is seen as a highly capable operator steeped in NBCU’s operations, and no one is rushing to swap in a new chief in the immediate aftermath of Shell’s stunning exit.
Ralph Roberts (Brian’s father) founded Comcast in 1963 after buying American Cable Systems, a 1,200-subscriber provider in Tupelo, MS. It officially took the name Comcast in 1969, putting down corporate roots in Philadelphia, and soon thereafter became a publicly traded company. Comcast went on to acquire control of NBCU in 2011 and full ownership in 2013. Although a wall of skepticism surrounded the transaction at the time, it has paid dividends over time, becoming an important corporate pillar during a decade of decline for the traditional cable business. Unlike AT&T’s spectacular misfire in acquiring Time Warner in a bid to marry content with distribution, Comcast’s addition of NBCU has been a largely positive experience.
The parent company and NBCU don’t lack for internal candidates for Shell’s job. Along with the NBCU chief, key business leaders of other Comcast divisions include Dana Strong, head of Sky, and Dave Watson, head of Comcast Cable. NBCU itself has a number of veterans in the senior exec ranks, among them Donna Langley, chairman of Universal Filmed Entertainment Group; Matt Strauss, chairman of Direct-to-Consumer and International; and Mark Lazarus, chairman of NBCU Television and Streaming.
As president, Cavanagh has strengthened his ties to CEO Brian Roberts, often channeling the thinking of the corner office by commenting publicly about a range of topics, leavening his strategic acumen with dry wit. Last month, for example, he said at a Wall Street conference that the company would be “happy” to sell its one-third stake in Hulu to Disney, which owns the rest. At a different conference in 2022, he offered a characteristically colorful-but-inside-the-lines answer when asked about the impact of turbulence in the media landscape, from streaming’s convulsions to windows debates to the erratic advertising business. “None of the upheaval out there is causing anybody inside our company to run around with their hair on fire wondering should we change plans,” Cavanagh said. “We bury our heads and go do what we know we need to do to deliver great results organically over the next bunch of years.”
Whoever ends up taking the reins at NBCU will need to put streaming at the center of their strategic vision for the company and it’s not an easy puzzle to solve. Peacock, the company’s 3-year-old entrant in the direct-to-consumer race, ended 2022 with 20 million paid subscribers and has gradually gained traction after a slow start. Shell presided over a pivot toward its premium subscriber tier after it began by emphasizing the free, ad-supported basic level of service. Cavanagh declared 2022 the year of “peak losses” for Peacock as it targets profitability by 2025.
The long-term fate of NBCU as a subsidiary of Comcast is also hanging in the balance, though Cavanagh and other execs have steadfastly refused to address it. The company has surfaced in a number of M&A discussions involving companies like Roku, WWE and Electronic Arts and its $40 billion acquisition of Sky in 2018 and smaller deals for Xumo have shown it has a healthy deal appetite. Many Wall Streeters see it as a potential dance partner with Warner Bros Discovery given that both face challenges funding their streaming ambitions while also managing declining legacy TV assets.
Jeffrey Wlodarczak of Pivotal Research Group is one believer in the WBD combination scenario, and thinks that could be the capstone of a run of other deals. “We continue to expect Comcast to enter into acquisitions that are more likely to skew to the content side of the business (partly because there are no distribution assets for sale) with a WBD deal in ’24 remaining a realistic possibility,” he wrote in a recent note to clients.
Billionaire John Malone, the architect of the $43 billion merger of Discovery and WarnerMedia, prompted a wave of NBCU merger speculation in 2021 after that deal was announced. He called it “the pickle out of the jar” in an interview with CNBC. Elaborating, the WBD board member said he had discussed a number of scenarios with Comcast’s Roberts and the pair concluded that “all kinds of relationships could be contemplated between this enterprise that we’re creating and Brian’s enterprise,” pending regulatory approval.
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