Comcast CEO confident in profitable bidding struggle for Warner Bros. Discovery — however Wall Street not satisfied

The people at Comcast are saying “We got this in the bag.” Most of Wall Street isn’t so sure. 

The phrase coming from the cable large is that it has the money that Warner Bros. Discovery CEO David Zaslav needs – and that it should scoop up not less than components of the media conglomerate it’s most concerned with: its HBO Max streaming service and its top-ranked Hollywood studio.

But the enthusiasm from Comcast CEO Brian Roberts and his bankers at Goldman Sachs and Morgan Stanley is drawing skepticism on Wall Street and in Hollywood, which have been captivated by the bidding war for one of media’s most prize possessions. Final bids for the company are scheduled to be delivered later this week.

Comcast CEO Brian Roberts has the money to win a bidding struggle for Warner Bros. Discovery belongings — not less than that’s what the phrase is — however big bankers on Wall Street see issues — particularly regulatory ones. Donald Pearsall/NY Post Design

A mix of money points and regulatory hurdles makes Comcast a darkish horse to finish the deal even if it will probably come up with a profitable bid, the skeptics inform On The Money.

“Comcast’s problem is their stock is trading low and their leverage high, but their biggest problem is regulatory,” said an antitrust lawyer concerned in the deal. “It will be more than a two-year process and still fail.”

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A Comcast spokesman had no remark however a senior particular person at the firm says it’s as effectively positioned as anybody to make a run for the company. 

“We have plenty of growth opportunities in our six growth drivers, and we are investing in those,” this particular person said. “We have the best balance sheet and credit rating in our industry. We have an obligation to look at things so we do that.”

It will definitely need all of that and more. Warner Bros Discovery, aka WBD, homes a film hit machine studio, the No. 3 largest streamer in HBO Max, and big time cable properties like HBO and CNN. A deal might run as high as $70 billion.

A deal for David Zaslav’s Warner Bros. Discovery might run as high as $70 billion. WireImage

Even so, Roberts, with Goldman Sachs and Morgan Stanley at his aspect, is said to be lusting to mix WBD with Comcast, a media company that is breaking off its lefty cable network, MSNBC and financial news outlet CNBC into a separate company while leaving Roberts to handle a middling studio, scores challenged NBC and some broadband and cable pipes.

What’s unclear is how he will pay for a deal that will value many tens of billions of {dollars} relying on how a lot of WBD he bids on. Comcast has a weak money place—just $9 billion. It has an A-minus bond rating that might simply be destabilized with a large borrowing to finance the deal since it has almost $100 billion in debt.

Its stock price has cratered over the past 12 months amid investor business-model considerations. It’s down 36% in comparison with a almost 6% decline in arch rival Disney and a 14% spike in the S&P.

Comcast’s stock price has cratered over the past 12 months amid investor business-model considerations. REUTERS

Roberts’ entry to money has been in query not less than in Wall Street and media circles; he was just lately noticed in Saudi Arabia, assembly with officers from its huge public investment fund for financing, Wall Street executives say. Bringing in a international proprietor for a major US media asset could possibly be an issue in getting regulatory approval for any deal.

In the end Roberts may get the money (Goldman and Morgan will be persuasive) however money gained’t purchase you like from President Trump, whose regulatory equipment, particularly the DOJ antitrust division, is needed to OK any transaction.

Let’s just say Trump isn’t a fan of the CEO who runs the Trump-hating MSNBC, and “Saturday Night Live,” which mocks the president on a weakly foundation far more harshly than it did former President Biden, despite Sleepy Joe’s lack of psychological acuity while in workplace.

Meanwhile, Trump, as The Post has beforehand first reported, would love his pals at Paramount Skydance to emerge victorious in the WBD bake-off, which has also attracted curiosity in streaming large Netflix, the streaming large that is said to be offering fee in stock.

The president has all however assured the inexperienced light for Paramount Skydance’s almost $60 billion all-cash bid for the complete WBD. It could be run by impartial film producer David Ellison, the son of Oracle co-founder Larry Ellison, the billionaire Trump donor.

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