Shares of newly public Versant Media fell on the first day of trading as an independent public company, closing down 13% at $40.57.
Executives led by CEO Mark Lazarus were on hand at the Nasdaq market for the debut of the newly standalone entity that houses TV networks and complementary digital businesses, including CNBC, MS NOW formerly MSNBC), USA Network, Golf Channel, Oxygen, E!, SYFY, Fandango, Rotten Tomatoes, GolfNow, GolfPass and SportsEngine. Comcast announced about a year ago plans to separate declining linear cable assets its core broadband business and the rest of NBCUniversal.
The spinoff delivered Comcast stockholders with 1 share of Versant for every 25 shares of Comcast in hand. A downturn in Versant stock was expected as index funds and other investors primarily interested in holding Comcast cycle out and it could take a few weeks or more for the shares to settle with a true read on investor sentiment.
At a recent investor day, CEO Mark Lazarus and his team described plans to grow the new company beyond cable. Versant initially expects to generate $6.7 billion in revenue with 62% coming from linear distribution, 23% from advertising, 13% from its digital platforms and 3% from content licensing and other. It also expects $2.3 billion in EBITDA (earnings before interest, taxes, depreciation and amortization) and $1.5 billion in free cash flow
It debuts with $3 billion in gross debt, $750 million in cash on hand and 1.5 billion in total liquidity.
The spin is being closely watched as a statement on the future of cable, which throws off significant cash but has been in rapid decline as viewers migrate to streaming. Versant is also particularly interesting as a proxy for Discovery Global, another new linear television company Warner Bros. Discovery is planning to cut loose in the third quarter of 2026 as it sells its Warner Bros. studios and streaming assets to Netflix. David Ellison’s Paramount is attempting to derail that deal, announced late last year, and acquire all of WBD.
A takeover battle between the two bidders has largely come down to Discovery Global, which Par values at about $1 a share but WBD and some Wall Streeters say is worth significantly more.
Share price is a function of multiples of projected future revenue and other metrics based on financials, which, for Discovery Global, have not yet been nailed down, including the precise amount of debt that will be layered on the new company.
Meanwhile, Versant has settled on its new digs and unveiled in late December that it is making the historic New York Times building its permanent home. It had settled temporarily into three floors there but Lazarus told staff in a memo that it is taking another three and renovating all six as well as a lobby and cafeteria at 229 West 43rd Street.
“After careful consideration and hearing from many of you about how this location makes your commute more manageable, we have decided to remain here. We are excited to become a fixture in this hub of media, entertainment and finance,joining our neighbors – Paramount Global, Snap Inc., TikTok, Roku, Nasdaq, Morgan Stanley and Bank of America,” he wrote.
“Leaving 30 Rock and settling into this unique space was not always easy, but it has also become a special moment in our company’s history. Now, we look forward to setting down roots and transforming this space into our own permanent VERSANT New York Headquarters together.”
