Comcast Has Been Awfully Quiet. Are Brian Roberts and Jeff Shell Itching to Make a Deal?

Is Comcast poised to make a big move?

The cable and media giant has missed out on some snazzy acquisitions in recent years, failing to outmaneuver Disney to buy the bulk of 21st Century Fox’s entertainment assets and falling just short of nabbing WarnerMedia. Losing out on the latter stunned Comcast CEO Brian Roberts and NBCUniversal CEO Jeff Shell, who were enmeshed in planning how WarnerMedia would be integrated into their operations until Discovery landed their prize.

And the company has been looking at Electronic Arts, though it appears that efforts to acquire the game-maker have stalled. Those talks may have fallen apart earlier this year, but Roberts is bullish on gaming. He named his 32-year-old son Tucker the president of Comcast’s Spectator Gaming division in 2018, overseeing a competitive video gaming league and the arena attractions that house them.

In recent weeks, Shell has told confidants that he’d love to buy Netflix, which has become more digestible thanks to its recent stock slide, losing some $185 billion in value amid concerns about its subscriber defections. But some insiders believe that the NBCUniversal chief was talking theoretically. One issue could be that Netflix’s lacks a vast library of intellectual property, which could make any potential buyer wary of overpaying for the streamer. That is, of course, if Netflix were ever to hang a “for sale” sign on its door, especially since it has made no indication that it would even contemplate such a move. They could also just try to hold tight and see if Warner Bros. Discovery goes back on the auction block again, as some observers think it inevitably will once David Zaslav and his team have improved the company’s fundamentals and strengthened its streaming presence.

So where does this leave Comcast?

Roberts, colleagues say, is itching to pull off a statement-making move, but analysts believe that the timing might not be right for that kind of a deal. There would likely be regulatory hurdles to any major acquisition, which might force Comcast to get creative and spin off NBCUniversal. Plus, interest rates are rising, which makes the prospect of piling on debt less attractive. That’s a major consideration given that Comcast had some $92.7 billion in long-term debt on its books at the end of 2021.

“Their dilemma is that while they are still a very profitable and successful corporation, they are already highly leveraged,” says Hal Vogel, a veteran media analyst. “Moreover, their business model, which has served them so well for 30 years, is fraying at the edges.”

Cord-cutting continues to impact one of Comcast’s cable revenue, the theatrical box office remains depressed, and the company’s entry into the streaming space hasn’t gone as well as planned. Peacock, Comcast’s service, has been overshadowed by Netflix, Disney+ and HBOMax, and even Shell has admitted to colleagues that he thinks that NBCUniversal was too late in joining the streaming fray. Peacock, which offers a mixture of ad-supported and paid, ad-free tiers, recently reported that it has 28 million monthly active accounts and 13 million paid subscribers.

A spokesperson for Comcast declined to comment.

Some Comcast insiders and analysts believe that the company doesn’t have to get any bigger to compete. They don’t rule out the possibility that Roberts would make an opportunistic deal if an attractive target comes along, but they don’t believe Comcast will buy something just to make a statement.

“They are very careful about not overspending and they are good at drawing the line,” says Peter Newman, head of Tisch School of the Arts’ MBA/MFA program at New York University. “They’re not afraid to keep their powder dry.”

Comcast is also feeling more confident in their decision to offer an ad-supported version of Peacock, particularly after rivals such as Netflix recently announced they were contemplating following suit.

While Roberts contemplates an ideal M&A marriage, the content producing part of his empire, overseen by Shell, suffers from a Byzantine structure. There are roughly half-dozen executives making movies, television shows and streaming programs. They include Universal Filmed Entertainment Chairman Donna Langley, Entertainment Networks Chairman Francis Berwick, Universal Studio Group Chairman Pearlena Igbokwe, Entertainment Content Chairman Susan Rovner, NBCUniversal Television and Streaming Chairman Mark Lazarus, and newly installed Peacock president Kelly Campbell.

Comcast is weighing installing one central leader, company insiders say, a role that would look something like a chief content officer across all of NBCUniversal. Langley is an obvious choice, given her deep ties to the creative community and years atop the film studio. And others are angling for that elevated post. Rovner, a former president of television at Warner Bros., offers up both television and streaming experience, two areas of growth. Igbokwe oversees four different content production labels and has a track record of hits. Ironically, some of the buzziest titles she’s developed, like “Hacks,” have become the darlings of rival companies.

But if Roberts and Shell opt to make deal, analysts caution that buying a company won’t make Comcast’s challenges disappear. In media, size doesn’t always equal success. Comcast has a market cap that dwarfs those of Disney, Warner Bros. Discovery and Netflix. But the public has yet to embrace Peacock in the way it has other streaming services.

“It’s not clear that when it comes to the streaming wars, the biggest player is going to win,” says Newman.

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