Comcast looks to cut up to $1 billion from budgets at its TV networks

Comcast Corp. is looking to cut as much as $1 billion from the budget of the TV networks in its entertainment division, NBCUniversal, money it can use to boost other parts of the business, according to people familiar with the company’s plans.

NBCUniversal Chief Executive Officer Jeff Shell has asked his top deputies to find savings at its legacy cable and broadcast TV networks, said the people, who asked not to be identified because the plans haven’t been finalized. Executives have explored many ways of cutting costs — including layoffs, trimming budgets for the development of new programs and changing the mix of programs on TV to produce more low-cost shows.

Comcast is in the middle of setting its budget for next year, and Shell has yet to make final decisions about how many cuts he will make or where they will occur. Those decisions are expected in the next couple weeks. Reallocating money from profitable but slow-growing TV networks could allow Comcast to invest more resources into its streaming service, Peacock, as well as its theme parks.

Bankers, analysts and executives have been speculating about what Comcast will do to boost its media business. NBCUniversal is one of the largest entertainment companies in the world — the owner of the NBC broadcast network, along with Universal’s movie studio and theme parks. It has a suite of cable channels, such as Bravo and E!, but has been one of the slowest of the major media companies to build up its streaming operations.

Peacock, at 13 million subscribers, showed no growth in the most recent quarter. It lost close to $500 million. To make matters worse, Comcast, the largest US cable TV provider, also reported no new customers for its internet access business.

Comcast explored a merger with video-game maker Electronic Arts Inc., and has discussed other potential targets.

Every major media company is looking to cut costs due to pressure from Wall Street. Warner Bros. Discovery Inc. is in the process of firing thousands of workers and has said it will find $3 billion in cost cuts after its big merger, while Netflix Inc. has slowed the growth of its investment in original programming.

Investors once rewarded media companies for spending billions of dollars on unprofitable but growing streaming services. The recent struggles of Netflix, exacerbated by fears of a looming recession, have prompted investors to be more focused on profit than growth.

The companies can’t cut from streaming, their fastest-growing segment and one widely viewed as the future of the entertainment industry. They now need to find ways to cut budgets at their traditional TV networks without making them unappealing to viewers. Comcast’s TV networks still generate billions of dollars in profit a year.

NBCUniversal has already shut down or sold a couple of smaller sports cable networks and has shifted sports content such as the English Premiere League and Nascar to more popular channels such as USA. The company has discussed eliminating an hour of prime-time programming a night at the NBC broadcast network, the Wall Street Journal reported last week. The company is exploring ways to put more resources and top shows on Peacock, which unlike many streaming rivals hasn’t produced many hit original series.

Shell has been encouraging the company to prioritize Peacock, as evidenced by its higher spending and losses. But he’s still working to better integrate his different teams and divisions so that his direct reports are invested in Peacock’s success. The head of Peacock, Kelly Campbell, reports to direct-to-consumer chief Matt Strauss. Both Strauss and Susan Rovner, who oversees entertainment programming for NBCUniversal’s TV networks and streaming service, report into Mark Lazarus, the overall head of TV and streaming. The executives who run NBCUniversal’s movie studio, TV studio and news division all report to Shell. Bloomberg