Comcast President Says Company Is Better for Exploring Warner Bros. Discovery Bid Despite Low Likelihood of Success

Comcast president and soon-to-be co-CEO Mike Cavanagh admitted on Monday that the media giant didn’t expect that it had a “high likelihood of prevailing” in the bidding war for Warner Bros. Discovery, but said the company is “better for having taken a look” at its studio and streaming assets.

“We didn’t expect that we had a high likelihood of prevailing with the deal that made sense to us. So we debated whether to bother or not. Do we want the disruption? Do we want the distraction, etc,” Cavanagh told an investor conference hosted by UBS on Monday. “But it’s our job, so we thought better to take a look and do the work and see where it leads. You never know. And so that’s what we did.”

Cavanagh noted that Comcast was not interested in stressing its balance sheet, resulting in a bid that was “light” relative to competing proposals on cash. He argued that the offer would’ve gave Warner Bros. shareholders a “significant chunk of equity” and “substantial” ownership in a combined company that would’ve been a publicly-traded, controlled subsidiary of Comcast.

“That all fit as a proposal that made sense for us. In light of the fact that we like what we’re doing, we don’t need to do anything else,” he continued. “Had that come to be I think it would have been an interesting play. It probably would have changed our streaming aspirations to be global streaming aspirations by necessity. But otherwise, we respect and understand the decision of the Warner Brothers board. Obviously, they prefer the certainty of high levels of cash or collared stock and not what we were willing to go to to make it happen. So the good news is that we like what we were doing as I just described, and we roll on with a lot of focus, but I think we’re better for having taken a look.”

Cavanagh added that Comcast’s ambitions are “unique in media,” combining theme parks with broadcast TV, film and TV studios and streaming.

“We look at strategy for each of those pieces in the whole together as that’s the hand we’re playing, and we think it is a damn good hand,” he said.

Cavanagh’s comments come after Netflix came out on top in a bidding war for Warner Bros. Discovery, with the two companies striking an $82.7 billion deal that will see the former acquire the latter’s studio and streaming assets for $27.75 per share, which includes $23.25 in cash plus $4.50 in Netflix stock.

In addition to Comcast’s bid for the studio & streaming assets, Paramount submitted multiple bids for the entire company. The David Ellison-led media giant has since launched a hostile takeover bid valued at $30 per share, slamming Netflix’s deal as “inferior.”

Shares of WBD stock are up 5.8% on Monday morning, while Comcast shares are down 0.75%. Netflix stock is down 4.6%, while Paramount is up 5.24%.

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