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NBCUniversal owner Comcast is happy with its collection of businesses, including NBCUniversal and European pay TV arm Sky, at a time when much talk is focused on whether entertainment companies will need to look for more scale via deals after the Discovery-WarnerMedia merger announcement, CFO Michael Cavanagh told an investor conference on Wednesday.
“We like our portfolio,” he said during the virtual J.P. Morgan Global Technology, Media and Communications Conference, adding that the company has always looked at possible deals, but with a focus on whether they make strategic and financial sense. “We like the hand we have without M&A.”
While much talk centers around scale, the CFO argued that people often underestimate “the ability to execute” and “the ability to serve the creative community,” which at NBCU and Sky is “tremendous” as is the company’s content library. Overall, the conglomerate has “plenty of advantages to play our hand,” he said.
Asked about the scale of streaming service Peacock, Cavanagh said when Comcast acquires assets, “we do not take lightly” the need to operate well. “We can do what we need to do a variety of different ways” outside of acquisitions, including investing more in original content and partnering with others in international markets, he said.
His comments came a little more than a week after Discovery Inc. said it would merge with AT&T’s WarnerMedia, bringing together such TV channels as CNN, TBS, TNT, HGTV, Food Network and Discovery Channel, the Warner Bros. film studio, and streaming services HBO Max and Discovery+. They said the merger would create a “global leader in entertainment” and “a stronger competitor in global streaming.”
The mega-deal led Wall Street to debate whether other deals would follow. Wells Fargo analyst Steven Cahall was among those asking whether the likes of Comcast and ViacomCBS may be “suddenly feeling lonely.” Like some of his peers, he had suggested on March 17 a merger of WarnerMedia with Comcast’s NBCUniversal-plus-Sky, noting, “investor preferences for more-focused business models, and the industrial logic that arises from combining two big content libraries to better compete with Netflix and Disney.” But most on Wall Street have in recent days argued that Comcast/NBCUniversal was unlikely to launch a counter-bid for WarnerMedia.
Cavanagh also touted the early success of NBCUniversal’s streaming service Peacock, which had reached 42 million sign-ups as of late April, with a third of those being monthly active accounts. “We like what we see,” he said, including usage hours that are ahead of internal targets. He also noted the day-and-date release of Boss Baby 2 in July, which he called “another approach to bring excitement and value to folks and Peacock.”
Cavanagh said that “by no means is streaming easy for anybody” in the industry, but Comcast is looking to “play to our strengths,” including the pay TV ecosystem, its content library and advertising relationships.
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