Comcast president outlines unsuccessful WBD offer, future of Peacock

Comcast’s Top executives pulled back the curtain on the company’s failed bid on Monday. Warner Bros. Discoverydetails a very different bid from rival bidders.

Mike CavanaghComcast’s chairman and soon-to-be co-CEO, detailed the proposal — and the company’s thinking — during the meeting. UBS Global Media and Communications Conference On Monday, Comcast’s Warner Bros. Just days after it was eliminated from the bidding war for Discovery assets.

“Looking at the circumstances of how it all turned out … we didn’t expect that we were likely to win a deal that made sense for us. We debated whether to disturb or not. Do we want the disruption? Do we want the distraction?” said Cavanagh. “But it’s our job, so we thought we’d better take a look and do the work and see where it goes. You never know. So that’s what we did.”

like Comcast netflixonly Warner Bros. Bid for movie studio and HBO Max streaming business. Paramount Skydance The offer applied to the entire business, including its cable TV portfolio of networks such as CNN and TNT.

“We’re not interested in highlighting the Comcast balance sheet,” Cavanagh said Monday. he said. “As a result, this meant our offer was light compared to other offers I had obtained for cash.”

Last week, Netflix was named the winning bidder. On Monday, Paramount launched a hostile bid.

Comcast offered “significant equity in a combined entertainment company”; this would bring NBCUniversal together with Warner Bros., including its Universal theme parks and movie studio, as well as its broadcast network and streaming platform Peacock. Cavanagh said the studio and HBO Max are partners.

The resulting combination would be a publicly traded, controlled subsidiary of Comcast.

This vehicle would provide returns to shareholders but would not constitute a complete spin-off, which would require the companies to be completely separated. Comcast’s NBCUniversal is in the midst of revamping its portfolio of cable TV networks, which includes CNBC.

In contrast, Netflix’s proposed transaction consists of cash and stock valued at $27.75 per WBD share. The equity value of the transaction is $72 billion, and the total enterprise value is approximately $82.7 billion.

extraordinary went straight On Monday, WBD submitted an all-cash, $30-per-share tender offer to its shareholders; This equates to an enterprise value of $108.4 billion.

“We respect and understand the Warner Brothers board’s decision to clearly prefer the certainty of a high level of cash or retained stock,” Cavanagh said.

Comcast leadership has long said the company has a high bar for mergers and acquisitions.

“The good news is that we love what we do… and we are proceeding with great caution, but I think we might as well take a look,” Cavanagh said.

Comcast’s NBCUniversal has been changing shape in recent years, from spun off cable TV networks to increasing rights to sports like the NBA and strengthening its presence in theme parks.

The company is also building Peacock. NBCUniversal It launched streaming in 2020 and has slowly evolved since then.

As of September 30, Peacock had 41 million subscribers; This figure pales in comparison to HBO Max’s 128 million Number of customers as of September 30 and by the end of 2024, Netflix has more than 300 million customers.

Cavanagh said on Monday that Comcast is selling Warner Bros. If his bid for Discovery was successful, “it would be an interesting play,” he said.

“It probably would have necessarily transformed our desires to broadcast into desires to broadcast globally,” he added.

Sports have been key to Peacock’s playbook for growing subscriber base. In addition to simulcasting its “Sunday Night Football” package from NBC’s broadcast network, NBCUniversal also lost exclusive NFL games to Peacock. Bringing the NBA back to NBC, including games exclusive to Peacock, has come at a heavy cost. The Olympics have also been an integral part of growth.

Live events like the Macy’s Thanksgiving Day Parade also helped increase viewership on TV and online.

Like its peers, Peacock is increasing its subscription price. Peacock in July raised Just a few months before the start of the NBA season, prices are on the rise again.

But unlike many of its rivals, Peacock has yet to report a profit. For the quarter ending Sept. 30, Peacock reported a loss of $217 million, an improvement from a loss of $436 million in the same period last year. Cavanagh noted on Monday that Peacock’s earnings before interest, taxes, depreciation and amortization have increased by $900 million in the last 12 months.

Peacock’s losses are expected to “significantly improve” next year compared to 2025, “with a positive forward trajectory.”

Disclosure: CNBC’s parent company, NBCUniversal, owns NBC Sports and NBC Olympics. NBC Olympics owns the U.S. broadcast rights to all Summer and Winter Games through 2036. Versant will become CNBC’s new parent company, based on Comcast’s planned spinoff of Versant.