For years, Wall Street has viewed Warner Bros. Discovery as an ideal merger partner for Comcast, with a deal combining a treasure trove of IP, two major theatrical studios and much-needed scale for HBO Max and Peacock. On Tuesday, analysts’ dream scenario moved a step closer to possibility as WBD put up a “for sale” sign — including its highly-coveted studio and streaming business.
But as much as a combination between the two media heavyweights makes sense, there may be too many hurdles for Comcast to overcome. In addition to the standard antitrust review and the daunting financial burden of acquiring WBD’s assets and the debt that comes with it for any bidder, the media giant faces the challenge of getting regulatory approval under a president who seemingly loathes CEO Brian Roberts. That political issue is further complicated by the fact that Trump has publicly thrown his support behind the deep-pocketed Ellison family, whose acquisition of Paramount and multiple bids for WBD have already sent shockwaves through Hollywood.
When asked about a potential WBD combination back in 2024, Roberts himself said Comcast has a “high bar” for M&A, adding that he “loves” the company as it currently is. It’s also already in the midst of a pending spinoff of its cable network portfolio into Versant, which is expected to be completed by the end of the year.
But Comcast likely would at least take a look, particularly at the streaming and studios business that will split from Warner’s linear networks in April.
While multiple experts who spoke to TheWrap didn’t rule out Comcast getting into the mix that could result in driving up the price tag on a potential acquisition — similar to its impact on Disney’s winning Fox’s entertainment assets with a $71.3 billion acquisition — they expressed skepticism that Roberts would ultimately prevail against the Ellisons’ quest to build an entertainment superpower. Comcast’s record with M&A has certainly been mixed, including its withdrawal of a $54.1 billion bid for Disney, whose board and shareholders deemed was way too low.
“The studios and streaming side of the WBD fire sale is certainly and undoubtedly catching Roberts’ eye, but there’s nothing in his track record that shows he’s going to be the leader in acquiring such massive assets,” former NBC Studios president and Bull’s Eye Entertainment founder Tom Nunan told TheWrap. “You have an emotional buyer in the mix with Ellison, who’s willing to go further and he’s already made his case plain that he intends to get this asset. It’s very difficult to compete against an emotional buyer that way.”
Representatives for Comcast and Warner Bros. Discovery declined to comment for this story.
‘Doubling down on stupid’
Evan Shapiro, a veteran film and TV producer and former head of NBCU’s Seeso streaming service, believes a Comcast bid for WBD would be the “most confounding case of doubling down on stupid in the history of corporate media.”
“They have $9 billion cash on hand and $101 billion in debt. They are unwinding one merger (NBCU/Versant) and are still healing from the write-down of their last major acquisition (Sky),” Shapiro told TheWrap. “There are too many streaming services and not enough hours of attention in the day. So combining Peacock and HBO Max makes all the sense in the world. But having narrowly escaped spending way, way too much for Fox, and bungling their Sky purchase, you’d think the Comcast brain trust would have learned their lesson by now and stay away from that auction.”
One media executive who requested anonymity said Roberts and Comcast would also have to convince their own shareholders to get on board with investing even more money into the NBC and Peacock side of the business, the latter of which has yet to turn a profit, through a big acquisition.
“Comcast has always had a substantial amount of its investor base hesitant to see it spend more money on growing the NBC part of the business,” the executive said. “There’s been positive sentiment for the Universal theme parks part, but for putting more money into NBC and Peacock and that side of the business for a giant acquisition, I don’t think he’d get major investor support.”
While different deals could be structured, WBD is sitting on about $35 billion in debt — a major factor for any bidder. In the event that WBD followed through on its planned split, the majority of its debt would go to Discovery Global, which would house its linear networks.
A Comcast bid for WBD would be the “most confounding case of doubling down on stupid in the history of corporate media.” – Evan Shapiro, former NBCU executive
The Trump factor
Then there’s the “relationship” between Roberts and his most vocal critic: President Trump, who has not been hesitant to call him out by name over MSNBC’s coverage of the administration.
“Roberts has not been eager to bend the knee to Trump and the new administration, which could make approval of such a deal thorny, if not impossible, unless he agrees to play ball the way that Paramount and Disney already have,” Nunan said. “As unfair and even as unlawful as it is to require this obeisance by any administration, it’s just a fact of life these days until things change politically. Roberts has made the decision that his values and character at least comes first and he’s standing alone out there compared to some of his colleagues in the media space.”
A senior Trump official told The New York Post’s Charlie Gasparino that the ultimate owner of WBD is “very important” to the administration and that the media giant’s board “needs to think very seriously not just on the price competition but which player in the suitor pool has been successful getting a deal done.”
“And that points to the Ellisons,” the senior administration official added.
That official also called out Roberts directly, noting that the odds of him prevailing are “low.”
“Maybe Brian Roberts comes up with grand detente with the president but I don’t think that will happen and that’s the key,” the person added.
A White House spokesperson did not immediately return TheWrap’s request for comment.
As MoffettNathanson analyst Craig Moffett put it bluntly, Comcast is “badly disfavored” by the Trump administration.
“Given past commentary against all-things-Comcast from both the White House and the FCC over the past year, a successful Comcast acquisition of almost anything seems nearly unthinkable,” Moffet said in a research note. “Yes, it could be argued that Comcast might eventually win a legal challenge should a merger be illegally blocked, but such a challenge would take years, with potentially high ancillary costs.”
Beyond Trump, a deal would also require approval from regulators in the EU, UK, Canada and Australia and could also warrant scrutiny from the states, particularly California’s attorney general, New Street Research analyst and former FCC chief of staff Blair Levin said.
Staying in the game
Despite the various hurdles for Comcast, Roberts has to weigh the competitive disadvantage that would come from sitting on the sidelines. Though eMarketer senior analyst Ross Benes noted that HBO Max and Discovery+ don’t account for a big share of ad spend or time spent, he argued Comcast risks losing out on WBD’s “solid” studio assets.
“If Netflix or Paramount bought them, they would likely become the studio leader,” Benes said. “Universal has done well, but it would be tough to compete if two giant studios combined and opposed them.”
In a note published last month after the initial news of Paramount’s interest broke, Wolfe Research’s Peter Supino argued Comcast should “try hard” to buy WBD, adding that a merger could “fix NBCU’s ~$30B undervaluation” and that the financing and political hurdles “might be solvable.” He proposed issuing a new NBCU stock to WBD, eliminating its “super-voting share class, and appointing a chairman and a CEO “not named Roberts,” perhaps sweetening its bid with a position for David Zaslav.
In his own research note published on Oct. 14, Levin raised the possibility of Versant bidding for WBD’s cable networks, though it’s unclear that the company would be willing to add more linear exposure and the debt that comes with them.
Despite a “high probability” that a deal would get blocked by Trump’s DOJ, Levin said there’s a “material chance” that the courts could overturn an objection and clear the path for Versant. While he ultimately believes the Ellisons would still prevail, that drawn out legal issue could reduce the content available to a combined Paramount+/HBO streaming platform relative to Peacock in the interim, as well as the leverage a combined company would have over pay TV operators like Comcast, he said.
While acknowledging that Comcast would be the “odd man out without a dance partner to drive scale,” the media executive foresees a scenario in which Peacock could partner with a combined Paramount+/HBO Max and broker a deal to leverage the latter’s IP in Universal’s theme parks, but emphasized it would require Roberts having to “give up some degree of control there, which he’s never been one to do.” It’s also worth noting that Universal’s theme parks already partner with Warner Bros. on their wildly popular Wizarding World of Harry Potter attractions by paying WB a licensing fee for the IP.
Despite fears of consolidation in Hollywood, Nunan believes there’s still room for various tiers of success and size and argues not every media player has to operate with the same profile, asset base or business plan.
“We all know that there is consolidation on the horizon. We all wonder about companies like Comcast and Paramount and Sony and Lionsgate. But I also think there’s a world where these companies could just continue moving along,” Nunan said. “There’s a world where Comcast might just hold their cards the way they are and wait and see what happens. They don’t have to dominate the business.”
