M&A is ‘viable’ despite President Trump’s regulatory environment

comcast On Thursday, it gave investors a clue about the company’s potential M&A aspirations. That means management believes the deal can go through despite recent negative comments.

Comcast is one of the stakeholders in the potential deal. warner bros discovery. WBD, the owner of TNT Sports, CNN, HBO, Warner Bros. Studios and other media properties, has officially put itself up for sale “following interest from multiple parties,” WBD CEO David Zaslav said in a statement last week.

Several experts and analysts have argued that Comcast has little to no chance of making a deal from a regulatory perspective, given President Donald Trump’s sharp comments against Comcast CEO and controlling shareholder Brian Roberts. Others say the path forward may not be doomed.

On Thursday, in conjunction with the company’s third-quarter earnings call, soon-to-be co-CEO Mike Cavanagh shed some light on how management views the situation, without specifically mentioning Warner Bros. Discovery as a potential partnership.

“I think a lot more is possible than maybe some of the public comments that are out there,” Kavanaugh said Thursday.

In April, President Trump called Comcast and Roberts “a disgrace to the integrity of the broadcast industry” in a post on his social media platform Truth Social. Trump also called Roberts a “scumbag” and referred to Comcast as “Concast.”

Some equity research analysts expect the Trump administration to block Comcast’s acquisition of Warner Bros. Discovery. WBD continues to work toward its planned separation into two publicly traded companies while expanding its strategic review.

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

In a note to clients, New Street Research analyst Blair Levin cited President Trump’s public comments about Roberts and said, “It is almost certain that the Trump Justice Department will not authorize CMSCA’s acquisition of WBD, and the outcome will be determined in court.”

“We, along with our cable colleagues, believe that (Comcast’s) political standing in the current administration is very low, and we believe that CMCSA will think long and hard about whether it is worth the long and difficult process of building enough goodwill to get a deal done,” Raymond James analyst Rick Prentice said.

Cavanagh reminded investors Thursday that just because the company is considering assets for sale in the media industry doesn’t necessarily mean a deal or even an offer is likely to materialize.

“I think I’ve said it many times in the past, and I’d like to say it again, that the bar to pursue an M&A transaction is very high given how strongly we feel about the business we have, the strategy we’re pursuing, and the opportunities in front of us,” Cavanagh told investors.

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

Assuming an offer for WBD and other media assets closes, it would have to make strategic sense for a future NBCUniversal led by broadcast television network NBC and streaming service Peacock.

Many of NBCUniversal’s moves so far have been about elevating Peacock’s standing in the streaming ecosystem. The company reported Thursday that Peacock had 41 million customers as of the end of last month, and its subscriber base remained flat over the year.

Kavanaugh said the company is looking for media assets to complement the separated NBCUniversal business.

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

Warner Bros. Discovery’s planned split would do just that, separating those businesses, combining streaming and the studio into one company and also putting streamer HBO Max and its global network in a separate company.

Paramount’s interest is in Warner Bros. Discovery as a whole, and while it has ruled out a split, other potential bidders are considering acquiring just a portion of the assets, CNBC reported.

“Given that, given what we’re asking for and where we’re going to be after Versant Spin, the agreement is not as far-fetched as some people think,” Cavanagh said.

In a hypothetical situation where Comcast would also spin off NBCUniversal, which would remain with the company after the Versant deal, and merge with WBD, LightShed analyst Rich Greenfield predicted the deal could clear regulators.

Wolf Research’s Peter Spino proposed a plan in which NBCUniversal would issue new shares to WBD on an exchange basis, eliminate Roberts’ voting rights in the new company, and appoint a chairman and CEO “other than Roberts.” This combination could lead to a deal, he wrote in a note to clients.

“The main issues facing Comcast’s bid – financing and politics – may be resolved,” Spino wrote.

Comcast may avoid pursuing a deal that could be blocked by the Trump Justice Department, but even that may not be a deal-breaker.

In President Trump’s first term, the Justice Department blocked AT&T’s early acquisition of Time Warner by Warner Bros. Discovery. In June 2018, a U.S. District Court judge approved the $85.4 billion sale, ruling that the government had failed to prove the deal was likely to harm consumers.

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

A Comcast spokesperson declined to comment for this article.

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

Warner Bros. Discovery doesn’t own any broadcast stations, so the acquisition of WBD would not require FCC review, but a deal of this size (WBD has a market capitalization of about $53 billion, plus $30 billion in debt) could still come under scrutiny from the Trump administration’s Justice Department.

Mr. Trump’s reputation as a business partner suggests Comcast may be able to avoid any interference by ingratiating itself with the president.

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

President Trump’s public distaste for Roberts and Comcast may be a related rant about his claims that MSNBC, now owned by NBCUniversal, is left-leaning. It’s unclear whether Trump has any specific interest in Comcast or NBCUniversal, which owns WBD assets other than CNN, which Trump also regularly criticizes.

If his main problem with Comcast’s acquisition of WBD is CNN, a non-network sale or transaction could avoid those problems. MSNBC will also be spun out into the Versant portfolio.

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

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