Comcast (CMCSA) struck a cautious tone on mergers and acquisitions during its quarterly earnings call Thursday — but left the door open to future dealmaking once its planned Versant cable-network spin-off is complete.
“We’ve said repeatedly, and I’ll say it again, that the bar is very high for us to pursue any M&A transactions given how strongly we feel about the businesses we have,” Michael Cavanagh, president of Comcast, said on the call. “That said, you should expect us to look at things [in and around] our industry. It’s our job to try to figure out if there are ways to add value.”
Cavanagh added that post-spin, “more things are viable than maybe some of the public commentary that’s out there,” particularly combinations involving streaming and studio assets.
The remarks come as speculation swirls around Comcast’s potential interest in Warner Bros. Discovery (WBD), which last week announced it had received multiple takeover approaches and launched a review of strategic alternatives.
Among the reported parties that have expressed preliminary interest are Comcast, Netflix (NFLX), and Paramount Skydance (PSKY). The companies did not respond to Yahoo Finance’s requests for comment.
Netflix, meanwhile, has publicly pushed back on the speculation. “We’ve been very clear in the past that we have no interest in owning legacy media networks,” co-CEO Ted Sarandos said on the company’s third-quarter earnings call last week. “There’s no change there.”
Some analysts argue the opportunity is ripe for Comcast. LightShed Partners’ Rich Greenfield has been calling for Comcast to merge NBCUniversal with Warner Bros. Discovery, calling it a “once-in-a-generation opportunity” to create a Disney-sized competitor.
“Comcast has always had Disney envy, and now it has a clear opportunity to create a Disney-like story, with an asset mix that could be even more compelling than Disney,” Greenfield wrote in a note published on Wednesday. “Investors and the press keep telling us all the reasons Comcast and Brian [Roberts] will not bid. Whereas all we think about is how can Comcast not take a shot.”
Greenfield said a combined NBCUniversal–Warner Bros. Discovery could reshape the media landscape, blending Universal and Warner Bros. studios, HBO Max and Peacock, and NBC and Telemundo networks under one roof.
He estimated about 40% of earnings would come from theme parks, another 40% from content creation, and less than 20% from traditional TV — a mix, he believes, would earn a higher valuation than legacy peers still burdened by cable.
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