Mergers and acquisitions ‘viable’ despite Trump’s regulatory environment

Comcast It updated investors on its potential merger and acquisition aspirations on Thursday. In short, executives believe the deal can be done, despite the recent pushback.

Comcast is among the parties interested in a potential deal for Warner Bros. Discovery. WBD — owner of TNT Sports, CNN, HBO and the Warner Bros. studio — said in a statement last week, WBD CEO David Zaslav said in a statement last week. and other media assets – has officially put itself up for sale after “receiving interest from multiple parties”.

Many pundits and analysts assumed that Comcast had little to no chance of making a deal from a regulatory perspective, given President Donald Trump’s words directed at Comcast CEO and controlling shareholder Brian Roberts. Others say the path forward may not be doomed.

On Thursday, alongside the company’s third-quarter earnings report, soon-to-be co-CEO Mike Kavanagh shed some light on how executives view the situation, without naming Warner Bros. Discovery specifically as a potential relationship.

“I think there are more things that are applicable perhaps than some of the public comments out there,” Kavanagh said Thursday.

Trump in April called Comcast and Roberts a “disgrace to the integrity of broadcasting” in a post on his social media platform Truth Social. Trump also called Roberts a “lowlife” and referred to Comcast as “Concast.”

Some equity research analysts have predicted that the Trump administration will block Comcast’s acquisition of Warner Bros. Discovery. WBD is still moving toward a planned separation into two publicly traded entities while it expands its strategic review.

Paramount is trying to buy the entire company before it can split, and WBD has so far rejected three separate offers from the David Ellison-run company.

“Trump’s Justice Department will almost certainly not allow CMSCA to purchase WBD and the outcome will be determined in court,” New Street Research analyst Blair Levin wrote in a note to clients, citing Trump’s public comments about Roberts.

“We believe with our cable colleagues [Comcast’s] “The political standing in this administration is very low and you would think CMCSA would think long and hard about whether the deal was worth the long and arduous process of creating enough goodwill to get the deal done,” wrote Raymond James analyst Rick Prentice.

Kavanagh reminded investors on Thursday that just because a company takes a look at assets for sale in the media industry, it doesn’t necessarily mean a deal, or even an offer, can materialize.

“I think we’ve said over and over again, and I’ll say it again, that the bar is very high for us to pursue any M&A deals, given how strongly we feel about the companies that we have, the strategies that we’re pursuing and the opportunities that are in front of us,” Kavanagh told investors.

Comcast subsidiary NBCUniversal is spinning off its group of cable networks, including CNBC, into a new entity called Versant.

Assuming a bid for WBD or other media assets emerges, it should make strategic sense for a future NBCUniversal, which will be led by broadcast television network NBC and streaming service Peacock.

Many of NBCUniversal’s moves so far have been aimed at bolstering Peacock’s position in the streaming ecosystem. Peacock had 41 million customers as of the end of last month, a subscriber base that has remained steady throughout the year, the company said Thursday.

Kavanagh noted that the company will look for media assets to complement its business in the post-NBCUniversal era.

“So in this case, it will be streaming assets and studio assets, since there are no other assets in the parks,” he said.

A planned division of Warner Bros. Discovery is set to separate exactly those companies: its streaming and studios into one company, which will also house its streaming device HBO Max, and its global networks into another.

While Paramount’s interest is in the entirety of Warner Bros. Discovery, eliminating the split, other potential bidders have considered acquiring only some of the assets, CNBC reported.

“Given that, what we’ve been looking for and what we’ll look like post-Versant,” Kavanagh said, the deal isn’t as far-fetched as some make it out to be.

In a hypothetical situation where Comcast was also set to spin off NBCUniversal, which is currently slated to remain with the company after the Versant deal, and merge it with WBD, LightShed analyst Rich Greenfield predicted the deal could pass through regulators.

Peter Supino of Wolfe Research proposed a plan under which NBCUniversal would issue new shares to WBD at an exchange rate, eliminating Roberts’ voting control in the new company, and appoint a chairman and CEO “not named Roberts.” This combination could lead to a deal, he wrote in a note to clients.

“The fundamental issues facing Comcast’s bid — financing and policy — may be solvable,” Supino wrote.

While Comcast may be shy about pursuing a deal that might be blocked by Trump’s Justice Department, even that deal may not be a deal breaker.

In Trump’s first term, the Justice Department blocked AT&T’s acquisition of Time Warner, a predecessor to Warner Bros. Discovery. In June 2018, a US District Court judge approved the $85.4 billion sale, ruling that the government failed to prove that the deal would harm consumers.

Some Comcast executives believe the regulatory concerns are either overblown or, at least, too early to be certain, according to people familiar with the matter, who have knowledge of Comcast’s strategy but spoke on the condition of anonymity to discuss internal thinking. There is some evidence to suggest that Comcast executives may have a point.

A Comcast spokesperson declined to comment for this article.

Skydance Media has received long-awaited FCC approval for its merger with Paramount after the CBS parent company agreed to a $16 million settlement with Trump during an episode of “60 Minutes.”

While the WBD deal would not require FCC review, because Warner Bros. Discovery does not own a broadcaster, an acquisition of this size — WBD’s market cap is about $53 billion plus another $30 billion in debt — could still draw scrutiny from Trump’s Justice Department.

Trump’s reputation as a dealmaker suggests Comcast may be able to avoid any interference by endearing itself to the president.

Comcast is one of 37 companies that donated to Trump’s effort to build a $300 million White House ballroom through the Trust for the National Mall.

Trump’s public antipathy toward Roberts and Comcast may just be silliness related to Trump’s assertions that MSNBC, currently owned by NBCUniversal, is left-leaning. It’s unclear whether Trump is explicitly interested in Comcast or NBCUniversal owning any of WBD’s assets other than CNN, which Trump has also routinely criticized.

If his primary issue with Comcast’s purchase of WBD was CNN, a divestiture or deal without the network could circumvent those issues. MSNBC will also be integrated into the Versant portfolio.

While Roberts will remain a shareholder in Versant, MSNBC will no longer be part of Comcast once Versant becomes its own publicly traded company at the beginning of 2026.

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant will become the new parent company of CNBC based on Comcast’s planned spin-off of Versant.