Will they or won’t they buy anything? And if so, what? With M&A speculation regularly swirling around the entertainment industry, including NBCUniversal owner Comcast, the cable giant’s executive team was quizzed on its appetite for acquisitions during the company’s earnings conference call on Thursday.
Comcast and NBCUniversal have in the past been mentioned as possible suitors of the likes of film libraries or other intellectual property, sports entertainment powerhouse WWE, parts of Walt Disney and, longer-term, maybe even the likes of Warner Bros. Discovery.
Comcast president Michael Cavanagh reemphasized to analysts on the fourth-quarter earnings conference call that the company weighs up whether any takeover adds enough to the mix given it has enough attractive businesses it wants to invest in and grow. As such, he once again signaled that any potential deal discussions would focus on whether buying a new asset makes financial and strategic sense.
“Is it worth it” paying for a deal, when compared to investing the money in Comcast’s existing businesses? That’s how Cavanagh explained the theme of discussions that the company would have when it comes to possible acquisitions. “Our bias has to be investing behind our businesses themselves, where we operate, control what we are doing, have momentum, no surprises,” the exec said.
With Comcast often seen as a potential buyer of big media assets, Cavanagh, the conglomerate’s former CFO, now president, had also told an investor conference in 2021 that “the bar is really high for us to pursue outright acquisitions of any material size.” He added: “We got a great hand to play with what we have.”
Meanwhile, NBCUniversal CEO Jeff Shell noted on Thursday’s earnings call that not all transactions have to be transforming mega-deals that add businesses where the buyer lacks expertise. “We are always looking for bolt-on acquisitions that bolster our business. And I’ll give two examples. We bought DreamWorks (Animation), and it’s been paying off steadily since our acquisition. And just now, Puss in Boots (The Last Wish), which is a big hit at the box office and really our entry back into the Shrek universe, continues to make that acquisition look really favorable. And we have invested in our Blumhouse investment over time where we are a partner with Jason Blum. And we have a big hit M3gan this month, which is coming out of that investment. So we are always looking at bolt-on acquisitions that don’t necessarily involve big industry consolidation questions.”
In December, Shell had discussed continuing industry consolidation at a UBS investor conference. “We have scale to do anything we want to do. It’s definitely going to be interesting,” he said. “There’s so much turmoil in our market among different competitors that you can imagine there’s going to be assets available at some point that must be attractive.”
Previously, Comcast chairman and CEO Brian Roberts had also signaled a focus on the businesses the company already owns and downplayed the need for big moves. “Looking ahead, we remain focused on our many exciting organic growth opportunities across all of our businesses,” he said, for example.
In September 2021, Roberts had said about the asset mix and positioning of Comcast that “I wouldn’t want to trade places with too many people, if anyone.” He had added back then that the COVID pandemic time was proof that “we are in good businesses (and) scale matters,” noting that during the pandemic some businesses, such as TV advertising, took a temporary hit, while others were “surging,” such as broadband.