As Warner Bros. Discovery has put itself up for sale, Comcast president Mike Cavanagh said that the bar remains “very high” for the company to pursue any M&A deals.
“The strategies we have are really sound and durable without M&A,” Cavanagh told analysts during Comcast’s third quarter earnings call on Thursday.
But he also acknowledged that the company would “look at things that are trading in the space around our industry” and figure out if there’s ways to add value, suggesting the company would be open to WBD’s studio and streaming assets.
Experts previously told TheWrap that, while a Comcast bid for Warner Bros. makes strategic sense, it would face challenges securing regulatory approval from the Trump administration and beating the deep pockets of the Ellison family, who have been aggressively bidding for all of the company.
When asked about the feasability of a potential bid, Cavanagh pointed to the company’s plans to spin off its cable network portfolio into Versant by the end of the year.
“We’ve been taking the path of setting Versant up as our cable network business, to pursue strategies that didn’t fit inside the new NBC media business with great strength and assets and the cash flows they have with light leverage. And that is on track to happen,” he said. “You can expect that any view we would have about other media assets that could be complementary to our existing media business would be of the same sort”
“In this case, it would be streaming assets and studio assets, since there’s no other parks assets out there and that makes us such a unique company ourselves,” he continued. “So I think in light of that, what we’d be looking for post-Versant spin, I think more things are viable than maybe some of the public commentary that’s out there.”
The comments come as Warner Bros. Discovery launched a strategic review last week following “unsolicited interest” from “multiple parties” for all or part of the company.
In addition to continuing on with its planned split into Warner Bros. and Discovery Global, which is on track for completion in April, the company’s board will also consider separate transactions for those two companies or a deal for the entire combined company. WBD also said it would consider an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to its shareholders.
It also comes as Peacock’s subscriber growth remained flat at 41 million paid subscribers, though the company narrowed its quarterly loss to $217 million, compared to a loss of $436 million a year ago. Revenue for the streamer came in at $1.4 billion, down from $1.5 billion in the prior year period which included the Paris Olympics.
When asked how Peacock would continue to scale if Comcast doesn’t participate in M&A, Cavanagh touted the company’s partnerships with creative talent, including its new massive $1 billion TV and film deal with “Yellowstone” and “Landman” creator Taylor Sheridan, as well as Jason Blum, Chris Melendandri, Steven Spielberg, Jordan Peele, Christopher Nolan and others.
“Obviously, pay one movies and originals are a piece of the pie of driving scale in Peacock. And likewise, sports has been very successful for us,” Cavanagh continued. “It’s hard to build the kind of portfolio that we have. So obviously we have to pay the bill to meet the market. But beyond that, you have to produce it well. And I think NBC Sports has just got a great tradition of working with partners. And so I think many partners look to us to broaden their reach, increase the brand of their own properties and I think that’s a durable advantage for NBC broadly. So I don’t think M&A is necessary.”
