Comcast chief explains unsuccessful WBD bid and Peacock’s future

Comcast Top brass on Monday pulled back the curtain on the company’s failed bid Warner Bros. Discoverydetailing a completely different offer from competing bidders.

Mike Kavanagh, Comcast’s chairman and soon-to-be co-CEO, laid out details of the proposal — and the company’s thinking — during the UBS Global Media and Communications Conference on Monday, just days after Comcast emerged from a bidding war for Warner Bros. Discovery assets.

“When we looked at the circumstances that led to all of this happening…we didn’t expect that we would have a high probability of winning a deal that made sense to us. We debated whether we should care or not. Do we want disruption? Do we want distraction?” Kavanagh said. “But this is our job, so we thought we’d better take a look and put in the work and see where it leads. You never know. And that’s what we did.”

Comcast, like Netflixbid only on Warner Bros. movie studio. and HBO Max streaming business. Paramount Skydance The offer was for the entire business, including the cable television group that consisted of networks like CNN and TNT.

“We’re not interested in stressing Comcast’s balance sheet,” Kavanagh said Monday. “As a result, this meant that our proposal was light, compared to other proposals I had raised, in terms of money.”

Netflix was selected last week as the winning bidder. Paramount on Monday launched a hostile bid.

Comcast offered “a significant portion of equity in a combined entertainment business,” which would have put NBCUniversal — including the Universal theme parks and film studio as well as the streaming network and streaming platform Peacock — alongside Warner Bros.’ “Studio and HBO Max,” Kavanagh said.

The resulting group would have been a publicly traded and controlled subsidiary of Comcast.

This vehicle would provide shareholders with returns, but would not constitute a complete spin-off, which would have involved a complete separation of the companies. Comcast’s NBCUniversal is in the process of producing its portfolio of cable TV networks, which includes CNBC.

In contrast, the proposed Netflix deal consists of cash and stock worth $27.75 per WBD share. The equity value of the deal is US$72 billion, and the total enterprise value is approximately US$82.7 billion.

Paramount went directly to WBD shareholders on Monday with an all-cash offer of $30 per share, equating to an enterprise value of $108.4 billion.

“We respect and understand the decision of the Warner Bros. Board of Directors to prefer certainty regarding high levels of cash or restricted stock,” Kavanagh said.

Comcast leadership has long said the company’s barrier to doing mergers and acquisitions is high.

“The good news is that we love what we do… and we continue to work with great focus, but I think we are better now that we have taken a look,” Kavanagh said.

Comcast’s NBCUniversal has changed in recent years — from the emergence of its own cable TV networks, to a heavy focus on growing the rights to sports like the NBA, to beefing up its presence in theme parks.

The company also builds Peacocks. NBCUniversal launched its streaming service in 2020 and it has been slowly growing ever since.

As of September 30, Peacock had 41 million subscribers, which pales in comparison to HBO Max’s 128 million customers as of September 30 and Netflix’s more than 300 million customers as of late 2024.

Kavanagh said Monday that if Comcast’s bid for Warner Bros. Discovery had been successful, “it would have been an interesting play.”

He added: “Maybe this could have changed our streaming aspirations to necessarily become global broadcasting aspirations.”

Sports have been a key game player in driving Peacock’s subscriber growth. NBCUniversal has exclusive NFL games for Peacock as well as simulcasting its Sunday Night Football package from the NBC broadcast network. It paid big to bring the NBA back to NBC, with games exclusive to Peacock as well. The Olympics were also an integral part of its growth.

Live events like the Macy’s Thanksgiving Day Parade have helped drive viewership across TV and streaming as well.

Peacock has also increased its subscription price, similar to its peers. In July, Peacock raised prices again, just months before the start of the NBA season.

Unlike most of its competitors, Peacock has yet to report earnings. For the quarter ended Sept. 30, Peacock reported losses of $217 million, an improvement of $436 million in losses during the same period last year. Kavanagh noted Monday that Peacock’s earnings improved over the past 12 months by $900 million before interest, taxes, depreciation and amortization.

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

Disclosure: NBCUniversal, parent company of CNBC, owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder for all summer and winter games through 2036. Versant will become the new parent company of CNBC based on Comcast’s planned spinoff of Versant.