Comcast reveals interest in Warner Bros.’ streaming studios and consoles
NBCUniversal owner Comcast is already interested in some Warner Bros. assets. Discovery.
On a Thursday call with analysts to discuss third-quarter earnings, Comcast Chairman Mike Kavanagh suggested that the Philadelphia giant might make a bid for certain Warner assets, primarily Warner Bros. Studios. For film, television, and the streaming service HBO Max.
Sources had previously said that Comcast was seeking to join the Warner Bros. Discovery auction after that company’s board of directors officially opened the process last week. Warner’s board of directors unanimously rejected three unsolicited offers from David Ellison’s Paramount, which offered $58 billion to buy all of Warner Bros.’ productions. Discovery.
Comcast is not seeking to acquire the entire company or Warner’s large cable channel portfolio, which includes CNN, TBS and Food Network. Instead, Kavanagh suggested Comcast’s interest would be narrower.
He noted that NBCUniversal and Warner Bros. They have compatible businesses. Comcast wants to grow its studio business and its struggling streaming service Peacock, which lost $217 million during the quarter.
“You should expect us to look at things that are trading in our industry… Our job is to try to see if there are ways to add value,” Kavanagh told analysts.
But he added a note of caution, saying the company did not feel the merger was “necessary.”
“The bar is too high for us to pursue anything [merger] Transactions,” he said.
The Warner Bros. auction is coming. Discovery amid deep industry turmoil. Traditional entertainment companies, including Warner and NBCUniversal, have long relied heavily on cable programming fees to boost profits, but consumers have cut back on their pay-TV subscriptions amid the move to streaming.
To meet this challenge, Comcast is spinning off its cable channels, including CNBC, MSNBC, USA and Golf Channel, into a separately traded company called Versant. This process is expected to be completed this year.
As part of the transition, liberal-leaning MSNBC is changing its name to MS Now and dropping the peacock from its network logo, reflecting its upcoming exit from NBC, which will remain part of Comcast.
Kavanagh suggested that Comcast would not redouble its efforts in the flagging cable channel business it had already exited.
But Warner has other compelling businesses, including HBO and its film and TV studio Warner Bros. Warner Bros. studio released A string of hit movies this year, including “Superman” and “A Minecraft Movie.”
Warner and NBCUniversal are investing in their own streaming services, but both are lagging behind Netflix, YouTube and Walt Disney Co. In terms of the number of subscribers and participation. Peacock has 41 million subscribers. The service has lost billions of dollars since Comcast launched it five years ago.
To support Peacock and streaming network NBC, Comcast has doubled down on its efforts in sports, including striking a $27 billion, 10-year deal for NBA basketball, a contract that begins this month with the new season. (Nielsen ratings for NBC’s NBA opener last week were strong — nearly 5 million viewers.)
Most analysts believe Ellison’s Paramount is best positioned to win over Warner Bros. Discovery. They point to the determination, wealth, and political connections of the Ellison family. Tech giant Larry Ellison, who is backing his son’s bid, is the second-richest man in the world after Elon Musk, and President Trump views the elder Ellison as a good friend.
In contrast, Trump has taken a dim view of Comcast Chairman and CEO Brian Roberts, largely due to Comcast’s ownership of MSNBC, which Trump has accused of being an arm of the Democratic National Committee.
The tension has led observers to conclude that Comcast will face a stormy regulatory review process with Trump overseeing the Justice Department, which will likely conduct an antitrust review of any major Warner Bros. deal. Discovery.
Kavanagh said concerns about Comcast’s ability to get deals through the Trump administration may be overblown.
“I think there are more things that are applicable perhaps than some public comments [suggests]Kavanagh said.