spinoff

A spinoff is a process by which a portion of an existing organization is separated to form a new, independent entity. In corporate use, the parent company creates a new company by transferring assets and liabilities and distributing shares to existing stockholders. In media and entertainment, a spinoff refers to a new work built around characters or settings from an existing work, such as a television series, film, or franchise.

Common forms include a spinoff (full separation with distribution of the new company's shares to parent shareholders), a carve-out (sale of a minority stake via an initial public offering while the parent retains control), and a split-off (a share swap where shareholders exchange parent shares for a stake in the new entity). The choice of structure affects tax treatment, control, and the degree of separation from the original business.

Motivations include unlocking hidden value, allowing management to pursue a focused strategy, improving access to capital, and reducing corporate complexity. Tax considerations, regulatory factors, and strategic realignment can influence the structure. After completion, the parent may lose some scale advantages and bear refocusing costs, while the spun-off company must establish its own governance, funding, and strategy.

In entertainment and media, a spinoff emerges when a new work centers on figures or worlds derived from another property. Spinoffs can capitalize on an established audience but risk mismatching expectations if the new premise diverges from the source material.

Notable corporate spinoffs include Agilent Technologies from Hewlett-Packard in 1999, and the 2015 split of Hewlett-Packard into HP Inc. and Hewlett Packard Enterprise, as well as the 2015 spin-off of PayPal from eBay. In media, examples include Frasier (from Cheers) and The Jeffersons (from All in the Family).