Versant Media Group Inc.

03/03/2026 | Press release | Distributed by Public on 03/03/2026 15:46

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with our combined financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K. For more information about our company's operations, see "Item 1. Business". The following discussion and analysis includes forward-looking statements. These forward-looking statements are based on our current expectations and are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed elsewhere in this Annual Report on Form 10-K, particularly in "Note About Forward Looking Statements" and "Item 1A. Risk Factors."
Overview
We are a media and entertainment business that operates in four core markets: political news and opinion, business news and personal finance, golf and athletics participation and sports and genre entertainment. We serve these markets primarily through a strong portfolio of brands comprised of renowned networks and complementary digital platforms.
The following is a summary of our financial performance, which is presented on a combined basis as part of Comcast and does not reflect our expected cost structure in periods following the Separation:
•Revenue of $6.69 billion and $7.06 billion for 2025 and 2024, respectively;
•Net income attributable to Versant of $930 million and $1.36 billion for 2025 and 2024, respectively;
•Adjusted EBITDA of $2.42 billion and $2.80 billion for 2025 and 2024, respectively. Adjusted EBITDA is a financial measure not defined by generally accepted accounting principles in the United States ("GAAP"). See "Non-GAAP Financial Measures" below for additional information, including our definition and use of Adjusted EBITDA and for a reconciliation from net income attributable to Versant to Adjusted EBITDA.
•Cash flows from operations of $2.0 billion and $2.21 billion for 2025 and 2024, respectively.
Recent Events and Factors Affecting Results of Operations and Comparability
Transition to Standalone Company
On January 2, 2026, the Separation of Versant from Comcast was completed through the distribution of 100% of the shares of Versant Class A common stock and Versant Class B common stock (together, the "common stock") to holders of Comcast Class A common stock and Comcast Class B common stock as of the close of business on the record date of December 16, 2025. In connection with the Separation, Comcast's shareholders of record received one share of Versant Class A common stock or Class B common stock for every 25 shares of Comcast Class A common stock or Comcast Class B common stock, respectively, held as of the record date. Immediately after the separation, holders of Comcast's common stock prior to the distribution owned 100% of our issued and outstanding shares. On January 5, 2026, Versant's Class A common stock began trading on Nasdaq under the ticker symbol "VSNT".
Upon our Separation, we became subject to the requirements of federal and state securities laws and Nasdaq stock exchange requirements. We have begun to establish additional procedures and practices as a standalone company and have started to, and will continue to, incur additional expenditures in connection with our transition to a standalone company, including employee-related costs, costs to establish certain standalone functions and information technology systems, and other transaction-related costs. In addition, we have incurred, and will continue to incur, incremental costs related to operating as a public company, such as external reporting, internal audit, treasury, investor relations, board of directors, and stock administration, and expanding the services of existing functions such as information technology, finance, supply chain, human resources, legal, tax, facilities and insurance.
In connection with our Separation, we incurred approximately $3.0 billion of total debt, as further described in Note 8 to the combined financial statements and the "Liquidity" discussion below. Proceeds from the offering of our Senior Notes, together with a portion of the net proceeds of the borrowings under the Term Loans, were used to fund a special cash payment to Comcast of $2.25 billion and pay fees and expenses related to the financing transactions.
Held for Sale
In December 2025, we initiated a process to sell our SportsEngine business and the related assets and liabilities are classified as held for sale in our combined balance sheet as of December 31, 2025.
Basis of Presentation
For the periods presented in the combined financial statements included in this report, the Versant businesses were operated as part of Comcast. The combined financial statements have been derived from Comcast's historical accounting records as if Versant operations had been conducted independently from Comcast, and reflect the assets, liabilities, revenues and expenses of the Company on a historical cost basis. The combined financial statements were prepared in accordance with GAAP and pursuant to the rules and regulations of the SEC, which required allocations and other carve-out methodologies, using assumptions that management believes are reasonable. Accordingly, the combined financial statements herein for periods prior to the Separation may not be indicative of our future performance, do not necessarily include the actual expenses that would have been incurred by us, and may not reflect our results of operations, financial position, and cash flows had we been a separate, standalone company during the historical periods presented. See Note 1 to our combined financial statement for additional information.
Key Factors Affecting Our Business
We believe the key business and marketplace factors that are impacting our business include the following:
•Consumer Demand for Cable Television.The amount of revenue we earn from MVPD distribution has declined in recent years, primarily reflecting ongoing declines in MVPD subscriber levels due to evolving consumer preferences for consuming video content, and is expected to continue to decline in the future. As a result of these trends, we expect that our future success will depend on, among other things, our ability to compete with alternative content distribution platforms, our success in reaching new audiences by extending our content offerings through new distribution outlets, and our continued ability to distribute our networks on MVPDs.
•Advertising.We derive significant revenue from selling advertising on our networks, and have experienced in recent years, and expect to continue to experience, declines in advertising revenue caused by shifts in advertiser priorities primarily due to increased competition for the leisure time of viewers, increased audience fragmentation and increased use of streaming and digital platforms (all of which we expect will continue in the foreseeable future), as well as by cyclical factors, such as election cycles and the timing of major sporting events, the availability of advertising-blocking technologies and macroeconomic conditions. In addition, lower audience ratings and reduced viewership, which our networks have experienced, and likely will continue to experience, affect pricing and the willingness of advertisers to purchase advertising.
•Growth of Digital Platforms.Our digital platforms generate revenue from selling advertising, providing services directly to consumers and selling cloud-based technology and related services. The growth of digital platforms continues to be shaped by evolving consumer behavior and broader macroeconomic conditions, including changes in consumer spending patterns, concerns about data privacy and evolving preferences for digital engagement through websites and mobile applications. Our revenue from our digital platforms has grown in recent years, and we expect that it will continue to grow as we invest in this growing portion of our business.
•Competition for Programming.The market for programming has been, and we expect will continue to be, very competitive. In recent years, sports programming in particular has become significantly more competitive and expensive. We expect to continue to devote significant resources to acquire sports programming in the future, and our ability to continue to provide compelling content will be vital to our success.
•Impact of Macroeconomic Conditions.A substantial portion of our revenue is impacted by consumer spending patterns, which are affected by prevailing economic conditions. Downturns in global economic conditions have in the past, and may in the future, negatively affect the spending patterns of consumers and, as a result, our current and potential customers, advertisers, vendors and others with whom we do business.
•Brand Value and Reputation.Our brand image, awareness and reputation strengthen our relationship with our audiences and can be important drivers of consumer and advertiser engagement. We are establishing the Versant brand as a standalone public company and elevated public scrutiny, geopolitical tensions and rapid consumer reaction have heightened reputational concerns.
•Public Company Costs. As a result of the Separation and costs associated with running an independent, publicly traded company, we have incurred and expect to continue to incur expenditures that are higher than historical allocations that were allocated pro rata based on revenue, which may have an impact on our profitability and operating cash flows.
We evaluate these and other factors as we develop and execute our strategies. For more information on the risk factors affecting our business, see "Item 1A. Risk Factors."
Operating Results
Year ended December 31,
Change
2025 2024 2023
2024 to 2025
2023 to 2024
(in millions)
Revenue
$ 6,688 $ 7,062 $ 7,445 (5.3) % (5.1) %
Costs and Expenses:
Costs of revenue (exclusive of depreciation and amortization)
2,937 3,064 3,154 (4.2) (2.8)
Selling, general and administrative 1,469 1,167 1,231 25.9 (5.1)
Depreciation and amortization 1,010 989 991 2.2 (0.2)
Total costs and expenses 5,416 5,220 5,375 3.7 (2.9)
Operating income
1,272 1,841 2,069 (30.9) (11.0)
Interest expense (13) - - NM NM
Investment and other income (loss), net (31) 1 - NM NM
Income before income taxes 1,228 1,843 2,069 (33.4) (11.0)
Income tax expense (297) (478) (530) (37.9) (9.8)
Net income 931 1,365 1,540 (31.8) (11.4)
Less: Net income attributable to noncontrolling interests
1 2 - (44.1) NM
Net income attributable to Versant
$ 930 $ 1,363 $ 1,539 (31.8) (11.4)
Adjusted EBITDA(a)
$ 2,425 $ 2,837 $ 3,060 (14.5) (7.3)
Percentage changes that are considered not meaningful are denoted with NM.
(a)Adjusted EBITDA is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" for additional information, including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income attributable to Versant to Adjusted EBITDA.
Revenue
Year ended December 31,
Change
2025 2024 2023
2024 to 2025
2023 to 2024
(in millions)
Revenue
Linear distribution
$ 4,092 $ 4,325 $ 4,632 (5.4) % (6.6) %
Advertising 1,577 1,731 1,865 (8.9) (7.2)
Platforms
826 795 734 3.9 8.3
Content licensing and other
193 211 213 (8.5) % (1.0)
Total revenue
$ 6,688 $ 7,062 $ 7,445 (5.3) % (5.1) %
Linear distribution revenueprimarily consists of revenue generated from the distribution of our television networks to traditional MVPDs, who offer video services over cable, fiber and satellite transmission, and virtual MVPDs, who offer video services through digital streaming. Our revenue from distribution agreements is generally based on the number of subscribers receiving our television networks through the provider and a per subscriber fee.
Linear distribution revenue decreased in 2025 and 2024, primarily due to declines in the number of subscribers of 8% in each of these periods, respectively, partially offset by contractual rate increases.
We expect to experience continued declines in the number of subscribers and linear distribution revenue, as further discussed in "Key Factors Affecting Our Business."
Advertising revenueconsists of revenue generated from sales of advertising on our networks and digital platforms. The price charged for each advertising unit on our networks is generally based on audience ratings, the value of our audiences to advertisers, the quality of our programming and brand building capabilities, any viewer targeting and addressability capabilities and the number of advertising units we can place in our networks' programming schedules. Advertising revenue is also generated based on website page or application visits.
Advertising revenue decreased in 2025 and 2024, as compared to the corresponding prior year periods, primarily due to decreases at our networks as a result of ratings declines of 17% and 8%, respectively. Ratings for the year ended December 31, 2025 continued to be negatively impacted by trends in linear advertising, and experienced further declines following the presidential inauguration, which was partially offset by higher digital advertising revenue.
We expect to experience continued ratings declines at our networks and continued shifts toward digital advertising in future periods, and these trends are further discussed in "-Key Factors Affecting Our Business."
Platforms revenueprimarily consists of revenue generated from services provided through our digital platforms. The GolfNow, Fandango and SportsEngine platforms facilitate consumer transactions with golf courses, movie cinemas and studios, and youth sports leagues, respectively. Our GolfNow, Fandango and SportsEngine offerings also include cloud-based technology solutions and related services to golf courses, movie cinemas and youth sports organizations, respectively. We also offer subscription services, including CNBC's branded offerings, which provide live and on-demand personal finance programming, and GolfPass, which offers instructional videos and other golf-related content. Our revenue related to these platforms is generally transaction-based, and depending on the service, generally consists of an agreed share based on the value of underlying transactions, transaction-based fees paid by the consumer or fixed amounts for individual transactions or services provided. We have generally concluded that we are the agent for the underlying transactions being executed through our platforms, and we therefore do not recognize revenue for each tee time booked, movie ticket sold, television or movie title rented or purchased, or sports registration.
Platforms revenue increased in 2025 and 2024, primarily due to increased transactional volumes related to services provided to golf courses, including an increased number of courses using our on-site payment facilitation services. The increase in platform revenue for the year ended December 31, 2025 was partially offset by decreases in revenue related to movie ticket purchases through our platform resulting from underlying box office performance.
Content licensing and other revenueconsists of revenue generated from licensing our owned content to third parties, including television networks, streaming services and other platforms, licensing audio feeds of our programming and original podcasts to digital platforms and other products and services.
Content licensing and other revenue decreased in 2025, primarily due to timing of content licensing agreements.
Costs and Expenses
Costs of Revenue
Year ended December 31,
Change
2025 2024 2023
2024 to 2025
2023 to 2024
(in millions)
Costs of Revenue
Programming and production $ 2,446 $ 2,606 $ 2,724 (6.1) % (4.3) %
Other 491 458 430 7.1 6.5
Total costs of revenue
$ 2,937 $ 3,064 $ 3,154 (4.2) % 2.8 %
Programming and production costs primarily consist of the amortization of licensed and owned content, including sports rights, direct production costs, production overhead and on-air talent costs.
Programming and production costs decreased in 2025, primarily due to lower costs associated with sports programming resulting from a reduced number of NASCAR events in the period pursuant to the terms of the current rights agreement commencing with the 2025 season, as well as the timing of other events. Programming and production costs in 2025 reflected lower reductions of programming and production costs of $48 million related to production tax incentives.
Programming and production costs decreased in 2024,primarily due to a production tax incentive recognized in 2024 and resulting in a benefit of $58 million (see Note 4 to the combined financial statements), as well as lower costs associated with sports programming driven by the timing of events, and lower costs associated with entertainment content. Programming and production costs are our most significant costs of revenue and are further discussed in "Key Factors Affecting Our Business" above.
Other costs of revenueprimarily include direct costs associated with transactions supported by our platforms, such as fees for data related to transactions available to consumers and payment processing fees, and other platform and customer support costs.
Other costs of revenue increased in 2025 and 2024, primarily due to higher transactional volumes related to our digital platforms.
Selling, General and Administrative Expense
Selling, general and administrative expense primarily consists of salaries, employee benefits, rent and other overhead expenses, including allocations of costs from Comcast related to shared functions and infrastructure.
Selling, general and administrative expense increased in 2025, primarily due to transaction and transaction-related costs associated with the Separation, which totaled $142 million, as well as an increase in the overall costs as we continued to build out functions in preparation for becoming a standalone public company, and partially reflecting lower allocated costs in the prior year period due to the inclusion of the incremental revenues generated by NBCUniversal's broadcast of the Paris Olympics in the cost allocation methodology. Transaction costs are incremental costs directly related to effectuating the Separation and primarily include legal, audit and advisory fees. Transaction-related costs are incremental costs incurred in anticipation of the Separation and primarily include IT separation and implementation costs, advisory fees and other one-time costs.
Selling, general and administrative expense decreased in 2024,primarily due to a decrease in allocated costs from Comcast. As discussed in "-Key Factors Affecting Our Business" and Note 11 to the combined financial statements, these costs were generally allocated on a pro rata basis using a measure based on revenue applied to the relevant pool of costs and may not be representative of our operating costs as a standalone company following the Separation.
Depreciation and Amortization Expense
Depreciation and amortization expense includes amortization of certain acquisition-related intangible assets, which primarily relate to our television networks, as well as depreciation of property and equipment.
Depreciation and amortization expense increased in 2025, primarily due to the acceleration of amortization of the MSNBC trade name as a result of rebranding the network. Depreciation and amortization remained consistent in 2024 and 2023. See Note 7 to the combined financial statements for additional information on our intangible assets.
Interest expense
Interest expense for the year ended December 31, 2025 was primarily due to interest accrued on our Senior Notes issued in October 2025. See Note8 to the combined financial statements for additional information on debt.
Investment and other income (loss), net
Investment and other income (loss), net, for the year ended December 31, 2025 was primarily due to impairment losses related to nonmarketable equity securities, which were partially offset by interest income. See Note 5 to the combined financial statements for additional information on our investments.
Income Tax Expense
Our effective income tax rate was 24.2%, 25.9% and 25.6% in 2025, 2024 and 2023, respectively.
The decreases in income tax expense for 2025 and 2024 were primarily due to decreases in income before income taxes and 2025 also included a noncash income tax benefit resulting from a reduced valuation allowance due to a change in tax status of one of our subsidiaries.
See Note 9 to the combined financial statements for additional information on our income taxes.
Non-GAAP Financial Measures
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure and is the primary basis used to measure the operational strength and performance of our business as well as to assist in the evaluation of underlying trends in our business. This measure eliminates the significant level of noncash depreciation and amortization expense that results from property and equipment and intangible assets recognized in business combinations. It is also unaffected by our capital and tax structures, and by our investment activities, including the impacts of entities that we do not consolidate, as our management excludes these results when evaluating our operating performance. Our management and Board of Directors use this financial measure to evaluate our operating performance and to allocate resources. It is also a significant performance measure in our annual incentive compensation programs. Additionally, we believe that Adjusted EBITDA is useful to investors because it is one of the bases for comparing our operating performance with that of other companies in our industries, although our measure of Adjusted EBITDA may not be directly comparable to similar measures used by other companies.
We define Adjusted EBITDA as net income attributable to Versant before net income (loss) attributable to noncontrolling interests, income tax expense, investment and other income (loss), net, interest expense, depreciation and amortization expense, and other operating gains and losses (such as impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived assets), if any. From time to time, we may exclude from Adjusted EBITDA the impact of certain other events, gains, losses or other charges that affect the period-to-period comparability of our operating performance.
We reconcile Adjusted EBITDA to net income attributable to Versant. This measure should not be considered a substitute for operating income (loss), net income (loss), net income (loss) attributable to Versant, or net cash provided by operating activities that we have reported in accordance with GAAP.
Reconciliation from Net Income Attributable to Versant to Adjusted EBITDA
Year ended December 31,
2025 2024 2023
(in millions)
Net income attributable to Versant
$ 930 $ 1,363 $ 1,539
Net income attributable to noncontrolling interests
1 2 -
Income tax expense 297 478 530
Investment and other (income) loss, net 31 (1) -
Interest expense 13 - -
Depreciation and amortization
1,010 989 991
Adjustments(a)
142 6 -
Adjusted EBITDA
$ 2,425 $ 2,837 $ 3,060
__________________
(a) Amounts represent the impact of certain events, gains, losses or other charges that are excluded from Adjusted EBITDA. For the periods presented, Adjusted EBITDA excludes transaction and transaction-related costs associated with the Separation. Transaction costs are incremental costs directly related to effectuating the Separation and primarily include legal, audit and advisory fees. Transaction-related costs are incremental costs incurred in anticipation of the Separation and primarily include IT separation and implementation costs, advisory fees and other one-time costs.
Year Ended December 31,
2025 2024
(in millions)
Transaction costs $ 36 $ 6
Transaction-related costs 106 -
Total transaction and transaction-related costs
142 6
Liquidity and Capital Resources
Year ended December 31,
2025 2024 2023
(in millions)
Cash provided by operating activities $ 2,022 $ 2,211 $ 2,428
Cash used in investing activities (155) (71) (60)
Cash used in financing activities (782) (2,155) (2,355)
December 31,
2025 2024
(in millions)
Cash and cash equivalents $ 55 $ 8
Restricted cash
1,034 -
Long-term debt 983 -
We generate significant cash flows from operating activities. Prior to the Separation, and for the periods presented in this report, we operated within Comcast's cash management structure, which used a centralized approach to cash management and financing of our operations. This arrangement is not reflective of the manner in which we would have financed our operations had we been an independent, publicly traded company during the periods presented.
Following the Separation, our capital structure and sources of liquidity have changed and we no longer participate in Comcast's centralized cash management program. In connection with the Separation we issued $3.0 billion of total debt, including the Senior Notes issued in October 2025 and borrowings under the Term Loans drawn upon the Separation. These borrowings and the $750 million Revolving Credit Facility entered into in connection with the Separation are further described below and in Note 8 to the combined financial statements. A portion of the proceeds from these borrowings, including the restricted cash on our balance sheet as of December 31, 2025, was used to fund a cash payment to Comcast of $2.25 billion at the time of the Separation as consideration for assets that were contributed to us in connection with the Separation. In addition, certain net working capital amounts, including outstanding advertising sales receivables, were prefunded through a separate payment prior to the Separation, which will negatively impact net cash provided by operating activities in 2026.
We believe that our available cash and cash flows from our operating activities, along with our borrowing capacity and access to capital markets, taken as a whole, will provide adequate liquidity to meet our current and long-term obligations when due, including our third-party debt, and to fund capital expenditures, while also providing flexibility to fund investment opportunities that may arise. However, there can be no assurances that we will be able to obtain debt or equity financing on acceptable terms in the future.
We expect to utilize our cash flows to continue to invest across our business, whether through organic or inorganic growth strategies, as well as to repay our indebtedness over time and return value to our shareholders through dividends and repurchases our common stock.
See Note 8 to the combined financial statements for additional information relating to our debt obligations.
Dividends and Share Repurchase Authorization
On March 3, 2026, our Board of Directors declared our first quarter dividend of $0.375 per share to be paid in April 2026.
On March 3, 2026, our Board of Directors also authorized a share repurchase program under which the Company may purchase up to $1 billion of its outstanding shares of Class A common stock.
Under the 2026 Share Repurchase Program, repurchases can be made using a variety of methods, which may include open market purchases, block trades, privately negotiated transactions, accelerated share repurchase programs and/or Rule 10b5-1 or other non-discretionary trading plans. The timing, manner, price and amount of any common share repurchases under the 2026 Share Repurchase Program are determined by the Company in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. The 2026 Share Repurchase Program does not obligate the Company to acquire any particular number of common shares, and the program may be suspended, extended, modified or discontinued at any time.
Cash Flow Information
Cash Provided by Operating Activities
Net cash provided by operating activities decreased for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to a decline in net income caused by lower revenue and an increase in net loss on investment activity, as described above, which was partially offset by an increase from changes in operating assets and liabilities. The increase resulting from changes in operating assets and liabilities was primarily due to a net favorable change in other operating assets and liabilities related to timing of payments on content obligations, as well as a decrease in noncurrent receivables. Operating assets and liabilities in our combined statements of cash flows generally fluctuate based on the timing of amortization and related payments for our content costs and the timing of collections of receivables.
Net cash provided by operating activities decreased in the year ended December 31, 2024,as compared to the year ended December 31, 2023, primarily due to a decline in net income caused by decreasing revenue as described above. The decrease in operating assets and liabilities for the year ended December 31, 2024was primarily due to a decrease in content costs, net, partially offset by an increase in current and noncurrent receivables, net.
As described in Notes 1and 11to the combined financial statements and above in "-Liquidity and Capital Resources," we have historically participated in Comcast's centralized cash management process, and as a result, the amounts and timing of operating receipts and payments may not be indicative of our results as a standalone company.
Cash Used in Investing Activities
Net cash used in investing primarily relates to capital expenditures, which increased for the year ended December 31, 2025 as a result of transaction-related capital spending for facilities and IT systems, and were consistent for the years ended December 31, 2024 and 2023. Net cash used in investing activities for the year ended December 31, 2025 also included consideration paid, net of cash acquired in connection with an acquisition. Such uses of cash in 2025 were partially offset by receivables settled in connection with the centralized cash management programs with Comcast. Other investing activities included net receipts from and payments to Comcast pursuant to loans associated with its centralized cash management programs. See Note 11 to our combined financial statements for additional information on these related party loans.
Cash Used in Financing Activities
Net cash used in financing activities for the year ended December 31, 2025 decreased primarily due to changes in net Comcast investment, which primarily resulted from cash generated from operating activities and swept to Comcast during the periods, partially offset by increased capital expenditures funded through Comcast's centralized cash management program. This decrease was offset by the net proceeds from the Senior Notes.
The reduction in cash used in financing activities for the year ended December 31, 2024 was primarily due to changes in net Comcast investment, which primarily resulted from lower cash generated from operating activities and swept to Comcast during the periods. See Note 2 to our combined financial statements for additional information on net Comcast investment.
Contractual Obligations
The following table summarizes our most significant contractual obligations following the Separation:
Total
Within the next 12 months
Beyond the next 12 months
(in millions)
Programming and production obligations (1)
$ 5,726 $ 1,402 $ 4,324
Debt obligations (2)
3,000 60 2,940
_____________________________
(1) Our largest contractual obligations are associated with our programming and production expenses. We have multiyear agreements for broadcast rights of sporting events, which represent the substantial majority of our programming and production obligations. In connection with the Separation, we assumed additional contractual obligations related to content contracts previously shared with Comcast, which are included in the table above. Approximately 87% of the aggregate obligations are due within the next five years. See Note 4 to our combined financial statements for additional information on programming and production costs.
(2) Our long-term debt as of December 31, 2025 included $1.0 billion of Senior Notes due in January 2031. As part of additional financing transactions entered into in connection with our Separation in January 2026, the Company borrowed amounts under the Term Loans totaling $2.0 billion, which are included in the table above. These aggregate debt obligations had a weighted-average time to maturity of approximately 5 years and a weighted-average interest rate based on the stated coupons of 6.6%. See Note 8 to our combined financial statements for additional information on our debt obligations.
Critical Accounting Estimates
The preparation of our combined financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and contingent liabilities. We base our judgments on our historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We believe our estimates associated with the valuation and impairment testing of goodwill and the accounting for content costs are critical in the preparation of our combined financial statements.
Valuation and Impairment Testing of Goodwill
Goodwill results from business combinations and represents the excess amount of the consideration paid over the identifiable assets and liabilities recorded in the acquisition. Because Versant's businesses were operated as a part of Comcast's Media segment, our combined balance sheets include an allocated amount of goodwill from Comcast's Media segment, which was determined using a relative fair value analysis as of July 1, 2024. This relative fair value analysis resulted in the allocation of approximately 40% of Comcast's Media segment goodwill to Versant. The fair values utilized in the relative fair value analysis were estimated using a discounted cash flow analysis based on Level 3 inputs. When performing this analysis, we also considered multiples of earnings from comparable public companies and recent market transactions. We test goodwill for impairment at the reporting unit level. Impairment analysis was performed at the Comcast level as of July 1, 2024 and in prior periods and based on this assessment, the estimated fair value of the Media reporting unit, and therefore the estimated fair value of the Versant reporting unit, substantially exceeded its carrying value and no impairment was required.
For periods after the initial allocation, we assess the recoverability of our goodwill annually as of July 1, or more frequently whenever events or substantive changes in circumstances indicate that the assets might be impaired. The assessment of recoverability may first consider qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. A quantitative assessment is performed if the qualitative assessment results in a more-likely-than-not determination or if a qualitative assessment is not performed. In connection with our impairment assessment process, from time to time, we may perform quantitative assessments in order to support our qualitative assessments.
When performing a quantitative assessment, we estimate the fair values of a reporting unit primarily based on a discounted cash flow analysis using Level 3 inputs that involves significant judgment, including market participant estimates of future cash flows expected to be generated by the business and the selection of discount rates. When performing this analysis, we also consider multiples of earnings from comparable public companies and recent market transactions.
Following Versant's change in chief operating decision maker in 2025 (see Note 2 to our combined financial statements), we reassessed our reporting units. We performed a quantitative assessment in connection with this change and with our annual impairment assessment as of July 1, 2025 and concluded that the estimated fair value of the Versant reporting units substantially exceeded their carrying value and no impairment was required. At December 31, 2025, we performed an updated quantitative assessment for the reporting unit comprised primarily of our television networks, which includes $6.49 billion of goodwill, given the market price indications for our Class A common stock and the relative significance of this reporting unit to our overall business. In connection with this assessment, we concluded that the estimated fair value of our television networks reporting unit continued to exceed its carrying value by more than 10%. Continued declines in cash flows for this reporting unit are expected to result in reduced fair values in future periods, which could result in an impairment to the extent the fair value is below the carrying value of the assets assigned to that reporting unit.
Changes in market conditions, laws and regulations and key assumptions made in future quantitative assessments, such as expected cash flows, competitive factors, discount rates and value indications from market transactions, including the market price of our Class A common stock, could negatively impact the results of future impairment testing and could result in the recognition of an impairment charge.
Content Costs
We capitalize the costs of licensed content when the license period begins, the content is made available for use and the costs of the licenses are known. Licensed content is amortized as the associated programs are used, incorporating estimated viewing patterns.
We capitalize costs for owned film and television content, including direct costs, production overhead, print costs, development costs and interest, as well as acquired libraries. Amortization for content predominantly monetized with other owned or licensed content is recorded based on estimated usage. Amortization for owned content predominantly monetized on an individual basis and accrued costs associated with participations and residuals payments are recorded using the individual film forecast computation method, which recognizes the costs in the same ratio as the associated ultimate revenue. The most sensitive factor affecting our estimate of ultimate revenue is whether the television series can be successfully licensed beyond its initial window. Estimates of ultimate revenue generally are limited to the amount of revenue attributed to the initial window unless and until it is determined that the content can be licensed beyond the initial license window.
Capitalized content costs are subject to impairment testing when certain triggering events are identified. The substantial majority of our owned content is evaluated for impairment on a group basis. Our licensed and owned content are generally assessed on a channel, network or platform basis. Sports rights are accounted for as executory contracts and are not subject to impairment. When performing an impairment assessment, we estimate fair value primarily based on a discounted cash flow analysis that involves significant judgment, including market participant estimates of future cash flows, which are supported by internal forecasts. Impairments of capitalized content costs were not material in any of the periods presented.
We recognize the costs of multiyear, live-event sports rights as the rights are utilized over the contract term based on estimated relative value. Estimated relative value is generally based on terms of the contract and the nature of and potential revenue generation of the deliverables within the contract.
Recently Adopted and Recently Issued Accounting Pronouncements
See Note 2 to the combined financial statements for recently issued and recently adopted accounting standards.
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