Who could’ve guessed that was coming? Calcbench users, that’s who!

Back in August we had two consecutive posts about large entertainment companies taking big impairments on their cable TV operations: Warner Bros. Discovery ($WBD) announced a $9.1 billion impairment charge on Aug. 7, and then Paramount Global ($PARA) followed up with a $6 billion impairment charge one day later. 

In both instances, the companies disclosed a long-term growth rate of negative 3 percent and discount rates of an eye-popping 10.5 percent (Warner Bros.) and 11 percent (Paramount). 

With horrible long-term prospects from those two, should anyone really be surprised that Comcast is getting out of cable TV now, before things get even worse? 

Comcast didn’t disclose similarly precise (and grim) projections in the Management Discussion & Analysis of its most recent quarterly report, but you could find clues in the text if you looked. For example, Page 20 provided a table breakdown of Comcast’s various operating units, including a “Media” unit that saw Q3 revenue up 36.5 percent. 

Underneath that table, however, Comcast warned that “We operate our Media segment as a combined television and streaming business. We expect that the number of subscribers and audience ratings at our linear television networks will continue to decline as a result of the competitive environment and shifting video consumption patterns…” (Plus, those Q3 numbers included a one-time pop from broadcasting the Olympics. Excluding Olympic revenue, the Media unit’s overall revenue only grew 4.9 percent.

One could also use our Disclosure & Footnote Query page to research whether Comcast has taken any goodwill impairments of its own. 

The answer, according to the company’s 2023 annual report, is kinda sorta. The goodwill in Comcast’s Media division held steady at $14.7 billion in 2021 and 2022, and then was revised upward in 2023 to $21.9 billion largely as a result of the company re-jiggering some of its operating divisions; but it also declared an $8.1 billion impairment in 2022 for its Sky operating division, which is the British media business that Comcast acquired in 2018.

In other words, if you had been reading Comcast’s footnote disclosures closely, and kept an eye on what its competitors were saying, it wouldn’t be far-fetched to guess that Comcast might do something like spin out its media business. 

The pieces of that mosaic were all there, scattered in the data. You just needed a good tool (like Calcbench) to find them!