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

Comcast updated investors on its potential M&A aspirations on Thursday. In short, executives believe a deal could be reached, despite recent criticism.

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

Several experts and analysts have argued that Comcast has little or no chance of reaching a deal from a regulatory standpoint, given President Donald Trump’s pointed remarks toward Comcast CEO and majority shareholder Brian Roberts. Others believe the path forward may not be doomed.

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

“I think more things are viable than maybe some of the public comments,” Cavanagh said Thursday.

In April, Trump 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 “thug” and referred to Comcast as “Concast.”

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

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

“It is almost certain that Trump’s DOJ would not authorize CMSCA to purchase WBD and that the outcome would be decided by a 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 weak and I think the CMCSA would think long and hard about whether a deal is worth the long, arduous process of creating enough goodwill to get the deal done,” wrote Raymond James analyst Ric Prentiss.

Cavanagh reminded investors Thursday that just because the company is looking at assets for sale in the media sector doesn’t necessarily mean a deal, or even an offer, could come to fruition.

“I think we’ve said it many times, and I’ll say it again, that the bar is very high for us to pursue M&A transactions, given the importance we place on the businesses that we have, the strategies that we pursue and the opportunities that lie ahead,” Cavanagh told investors.

Comcast’s NBCUniversal is spinning off its portfolio of cable networks, including CNBC, into a new entity called Versant.

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

So far, many of the moves NBCUniversal has made have been to strengthen Peacock’s place in the streaming ecosystem. The company reported Thursday that Peacock had 41 million customers at the end of last month, a subscriber base that has remained stable throughout the year.

Cavanagh said the company would seek media assets that would complement its post-spin NBCUniversal business.

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

The planned split of Warner Bros. Discovery would separate exactly these businesses: streaming and studios in one company, which would also house streamer HBO Max, and its global networks in another.

While Paramount’s interest is in the entirety of Warner Bros. Discovery, thus canceling a split, other potential bidders considered acquiring only a portion of the assets, CNBC reported.

Cavanagh said, “In light of that, what we’re looking for and what we’re going to look like after the Versant release,” a deal isn’t as far-fetched as some people think.

In a hypothetical situation in which Comcast also spins off NBCUniversal, which is currently expected to remain with the company after the Versant transaction, and merges 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 stock to WBD on an exchange ratio, eliminating Roberts’ voting control of the new company, and appoint a chairman and CEO “not named Roberts”. That combination could lead to a deal, he wrote in a note to clients.

“The main issues facing a Comcast bid – financing and politics – could be resolved,” Supino wrote.

While Comcast may be hesitant to pursue a transaction that could be blocked by Trump’s DOJ, even that may not constitute a compromise.

During Trump’s first term, his DOJ blocked AT&T’s acquisition of Time Warner, an earlier iteration of Warner Bros. Discovery. In June 2018, a U.S. District Court judge approved the $85.4 billion sale, finding that the government had not proven the deal would harm consumers.

Some Comcast executives believe the regulatory concerns are either overblown or, at least, far too early to determine, according to people familiar with the matter, who are familiar with Comcast’s strategy but spoke on the condition of anonymity to discuss internal thinking. Some evidence suggests Comcast executives might be right.

A Comcast spokesperson declined to comment for this article.

Skydance Media received long-awaited approval from the Federal Communications Commission for its merger with Paramount after CBS’ parent company agreed to a $16 million settlement with Trump over an episode of “60 Minutes.”

Although a deal for WBD won’t require FCC review, since Warner Bros. Discovery doesn’t own a broadcaster, so a buyout of this size (WBD’s market cap is about $53 billion plus $30 billion in additional debt) could still attract the attention of the Trump Justice Department.

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

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

Trump’s public dislike of Roberts and Comcast may be linked to Trump’s claims that MSNBC, currently owned by NBCUniversal, is left-leaning. It’s unclear whether Trump explicitly cares about Comcast or NBCUniversal owning WBD assets other than CNN, something Trump has also regularly criticized.

If its main problem with Comcast’s purchase of WBD is CNN, a divestiture or deal without the network could circumvent those issues. MSNBC will also be integrated into the Versant portfolio.

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

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC in Comcast’s planned spinoff of Versant.