Mediawan, SPE ‘could be targets’ for NBCU-Sky

Mediawan and Sony Pictures Entertainment (SPE) could be potential takeover targets for a standalone NBCUniversal/Sky, US analysts have suggested.

Comcast’s plan to split its entertainment and broadband business on Monday came as UK-based Sky neared a takeover of ITV, with suggestions that the combined US-European entity could be of interest to a buyer such as Netflix.

The global streamer had been in pursuit of Warner Bros Discovery until earlier this year when Paramount upped its bid, but Rich Greenfield of LightShed Partners, dismissed a combination.

Greenfield highlighted that NBCU’s broadcast network NBC would put it under the purview of US regulator the Federal Communications Commission, while streamer Peacock would not be “an asset Netflix would want to buy or maintain”.

Craig Moffett, analyst and co-founder of MoffettNathanson, agreed that NBCU’s library was not equivalent to WBD – “most would agree there’s a rather large gap”, he said – but admitted that “they’re the next best.”

NBCU’s profitable theme park division would also not be a straightforward fit for Netflix, LightShed’s Greenfield wrote in a blog, adding that “Comcast wants to increase NBCU’s scale, not sell or exit the business.”

Decade-old Mediawan, backed by US private equity firm KKR, could be one target Greenfield said, alongside gaming firm Roblox or SPE.

Mike Cavanagh, who has been lined up to run the standalone NBCU entity, reiterated on an investor call on Monday that expansion would be top of his agenda once the deal completes, which is likely to be next year.

Cavanagh said his plan would be “to build and invest for growth”, adding: “We have big ambitions to pursue opportunities that keep us ahead of evolving consumer behaviour and audience demands. And now we have the freedom to explore adjacent businesses where we have the right to play.”

Cavanagh and Comcast’s co-chief executive Brian Roberts, whose family will retain control of both companies after the split, also dismissed any notion that the strategy behind the separation is to create assets that could be sold.

Roberts, who worked on NBCU’s deal to spin off its cablenets into Versant, said the focus is on “putting each company [NBCU/Sky and Comcast] in the strongest position to create value, fully monetise their assets and aggressively pursue their own organic growth strategies.”

Peter Supino, analyst at Wolfe Research, said he expected the move would create a bidding war for NBCU, mirroring the way in which WBD’s proposal to split its cablenets and streamer/studio assets prompted a takeover battle between Paramount and Netflix that propelled the HBO owner’s share price.

“We doubt that this breakup will occur. Instead, we expect one or both Comcast units to merge with peers or competitors,” Supino wrote, with moves likely coming sooner rather than later to avoid being impacted by the tax benefits of the deal should they wait to make a move once the split completes.

“We believe the breakup plan is strategic to Comcast because it is a legitimately good idea that also strengthens Comcast’s negotiating position with partners who will not want to wait 1-2 years for an otherwise completed spin-out to ‘season’ for tax purposes,” Supino concluded.