NBCUniversal CEO Jeff Shell leaves behind company-defining decisions

As the shock wears off on the sudden departure of NBCUniversal Chief Executive Officer Jeff Shell, executives at NBCUniversal’s parent company, Comcast, 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 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.

In 2019, NBCUniversal agreed to an unusual deal with Disney, allowing it to sell its 33% stake in Hulu in January 2024 at a valuation of at least $27.5 billion. But comments from Disney CEO Bob Iger earlier this year have put Disney’s motivation to buy the remainder of Hulu in doubt.

Shell was a big fan of Hulu and thought it could supercharge NBCUniversal’s streaming efforts, according to people familiar with his thinking. Hulu ended 2022 with 48 million subscribers, more than doubling the number of customers paying for NBCUniversal’s flagship streaming service, Peacock, which topped 20 million in January. Both streaming services are U.S.-based. Uniting Hulu’s ownership could allow a media company to extend the brand globally, adding tens of millions more subscribers.

Acquiring Hulu’s 66% stake from Disney could cost Comcast more than $20 billion. Roberts will continue to be the ultimate decider on such a move. Losing NBCUniversal’s top operator may give Roberts some pause on a deal. Or, perhaps, it could spur Roberts to find new leadership through a large acquisition.

NBC Sports is interested in bringing the National Basketball Association back to NBC, its broadcast TV home from 1990-2002, CNBC reported in February.

It’s unclear if NBC will actually get a shot at buying the rights, as Disney and Warner Bros. Discovery have exclusive negotiating rights with the NBA until early next year. But if the NBA decides it wants NBC as a partner, the media company will have to pay billions per year for the privilege. The NBA is looking for a substantial increase in current rights payments, which are $1.4 billion annually for Disney and $1.2 billion for Warner Bros. Discovery.

NBCUniversal also owns several regional sports networks, whose own long-term business is in question as the NBA and Major League Baseball rethink how to broadcast local games amid the bankruptcy of Sinclair’s Diamond Sports Group.

Mark Lazarus was promoted to head of NBCUniversal Television and Streaming in May 2020. He has overseen NBC Sports Group for more than a decade. Roberts and Cavanagh can continue to rely on Lazarus and head of NBC Sports Pete Bevacqua for future media rights moves.

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.