NBCUniversal proprietor Comcast is certainly taken with a few of Warner Bros. Discovery’s belongings.
On a Thursday name with analysts to debate third-quarter earnings, Comcast President Mike Cavanagh recommended the Philadelphia large would possibly bid for sure Warner belongings, primarily the Warner Bros. movie and tv studios and its streaming service HBO Max.
Sources had beforehand mentioned Comcast was angling to hitch the Warner Bros. Discovery public sale after that firm’s board formally opened the method final week. The Warner board has unanimously rejected three unsolicited bids from David Ellison’s Paramount, which has provided $58 billion for all of Warner Bros. Discovery.
Comcast isn’t seeking to purchase the complete firm or Warner’s massive portfolio of cable channels that embody CNN, TBS and Meals Community. As an alternative, Cavanagh recommended that Comcast’s curiosity can be extra slim.
He famous that NBCUniversal and Warner Bros. have appropriate companies. Comcast desires to develop its studios enterprise and its struggling streaming service, Peacock, which misplaced $217 million through the quarter.
“It is best to count on us to have a look at issues which can be buying and selling in our area … It’s our job to strive to determine if there are methods so as to add worth,” Cavanagh advised analysts.
However he added a observe of warning, saying the corporate didn’t really feel {that a} merger was “essential.”
“The bar could be very excessive for us to pursue any [merger] transactions,” he mentioned.
The Warner Bros. Discovery public sale comes amid deep turmoil within the business. Conventional leisure corporations, together with Warner and NBCUniversal, have lengthy relied closely on cable programming charges to spice up revenue however customers have been scaling again on pay-TV subscriptions amid the transfer to streaming.
To handle that problem, Comcast is spinning off its cable channels, together with CNBC, MSNBC, USA and Golf Channel, right into a individually traded firm known as Versant. That course of is predicted to be full this yr.
As a part of the transition, the liberal-leaning MSNBC is altering its identify to MS Now and dropping the peacock from its community brand, reflecting its pending exit from NBC, which can stay a part of Comcast.
Cavanagh recommended that Comcast wouldn’t double-down in a declining cable channel enterprise that it was already exiting.
However Warner has different compelling companies, together with HBO and its Warner Bros. movie and tv studio. The Warner Bros. studio has launched a string of film blockbusters this yr, together with “Superman” and “A Minecraft Film.”
Warner and NBCUniversal are investing of their respective streaming providers however each lag Netflix, YouTube and Walt Disney Co. by way of subscribers and engagement. Peacock has 41 million subscribers; the service has misplaced billions of {dollars} since Comcast launched it 5 years in the past.
To shore up Peacock and the NBC broadcast community, Comcast has doubled-down on sports activities, together with placing a $27-billion, 10-year deal for NBA basketball, a contract kicked on this month with the brand new season. (Nielsen scores for the inaugural NBA recreation on NBC final week had been robust — almost 5 million viewers).
Most analysts imagine that Ellison’s Paramount is in the very best place to win Warner Bros. Discovery. They level to the Ellison household’s dedication, wealth and political connections. Tech titan Larry Ellison, who’s backing his son’s bid, is the second-richest man on the planet behind Elon Musk and President Trump views the elder Ellison as buddy.
In distinction, Trump has displayed a dim view of Comcast Chairman and Chief Govt Brian Roberts, largely, due to Comcast’s possession of MSNBC, which Trump has accused of being an arm of the Democratic Nationwide Committee.
The strain has led observers to conclude that Comcast would face a stormy regulatory overview course of with Trump overseeing the Division of Justice, which might seemingly carry out an anti-trust overview of any main transaction for Warner Bros. Discovery.
Considerations about Comcast’s capability to get offers by way of the Trump administration could also be overblown, Cavanagh mentioned.
“I believe extra issues are viable than possibly a few of the public commentary [suggests],” Cavanagh mentioned.
