NBCUniversal proprietor Comcast is certainly occupied with a few of Warner Bros. Discovery’s property.
On a Thursday name with analysts to debate third-quarter earnings, Comcast President Mike Cavanagh instructed the Philadelphia large may bid for sure Warner property, primarily the Warner Bros. movie and tv studios and its streaming service HBO Max.
Sources had beforehand stated Comcast was angling to affix 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 supplied $58 billion for all of Warner Bros. Discovery.
Comcast isn’t trying to purchase the complete firm or Warner’s massive portfolio of cable channels that embrace CNN, TBS and Meals Community. As a substitute, Cavanagh instructed that Comcast’s curiosity could be extra slim.
He famous that NBCUniversal and Warner Bros. have suitable companies. Comcast desires to develop its studios enterprise and its struggling streaming service, Peacock, which misplaced $217 million in the course of the quarter.
“You should expect us to look at things that are trading in our space … It’s our job to try to figure out if there are ways to add value,” Cavanagh instructed analysts.
However he added a word of warning, saying the corporate didn’t really feel {that a} merger was “necessary.”
“The bar is very high for us to pursue any [merger] transactions,” he stated.
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 referred to 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 instructed 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 Movie.”
Warner and NBCUniversal are investing of their respective streaming companies however each lag Netflix, YouTube and Walt Disney Co. when it comes to 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 hanging a $27-billion, 10-year deal for NBA basketball, a contract that kicked on this month with the brand new season. (Nielsen rankings for the inaugural NBA sport on NBC final week have been robust — practically 5 million viewers).
Most analysts consider 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 earth behind Elon Musk, and President Trump views the elder Ellison as a very good good friend.
In distinction, Trump has displayed a dim view of Comcast Chairman and Chief Government 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 evaluate course of with Trump overseeing the Division of Justice, which might probably carry out an anti-trust evaluate of any main transaction for Warner Bros. Discovery.
Considerations about Comcast’s capacity to get offers by the Trump administration could also be overblown, Cavanagh stated.
“I think more things are viable than maybe some of the public commentary [suggests],” Cavanagh stated.
