Comcast Emerges as Paramount Rival in Warner Bros. Deal

In a potential $60 billion media shake-up, Comcast could enter the fray to compete with Paramount Skydance to acquire Warner Bros. Discovery.

The cable TV giant might soon jump into the mix, the New York Post reported Tuesday, citing sources close to Paramount Skydance.

Insiders said Comcast, headed by Chair Brian Roberts, is spinning off its cable TV properties into a separate company called Versant.

Once that spinoff is complete, Comcast would consist mainly of its Peacock streaming service, Universal theme parks, NBC News, and Xfinity, which provides internet and cable services.

The Post reported that Skydance is particularly worried about a possible Comcast bid because Warner Bros. Discovery CEO David Zaslav has a long-standing partnership with Comcast's Xfinity unit to distribute content through its cable and broadband systems.

It's unknown which Comcast division would make a formal bid, but Roberts is said to be highly interested in Warner Bros. Discovery's content library, its top-ranked film studio, and its HBO Max streaming platform.

Sources told the Post that Paramount Skydance chief David Ellison is seeking alternative sources of cash amid doubts whether his father, Oracle co-founder Larry Ellison, the second-richest person in the world, is enthusiastic about opening his checkbook for another major media acquisition following the $8 billion deal to acquire Paramount.

Warner Bros. Discovery controls the No. 1 Hollywood film studio and owns HBO and CNN. The Post reported it recently turned to Goldman Sachs bankers to gauge the buyout landscape, just as David Ellison leaked he had his eyes on an all-cash bid for the company.

Other bidders Zaslav and Goldman have spoken to include Netflix and Amazon, sources told the Post.

It's unknown whether David Ellison will make good on his promise to bid on all of Warner Bros. Discovery with a massive cash offer. People close to Skydance told the Post he can't completely rely on his father, who is hesitant to finance the bid for Warner alone.

"For cash reasons [David Ellison] has to cobble together people for a deal," investor Mario Gabelli told the Post.

Gabelli owns shares of Paramount and Warner Bros. Discovery and has been watching the deal closely. By his calculations, Ellison's bid could exceed $60 billion because of the $30 billion in debt on Warner Bros. Discovery's balance sheet, and because Zaslav is shopping around to get the best deal for the company.

"There's a lot of moving parts here," Gabelli told the Post, including how much if anything Larry Ellison chips in from his own tremendous fortune to help make the numbers work.

Potential investors include Apollo — which in spring 2024 made a $26 billion, debt-fueled offer for Paramount before losing that race to Skydance, people with direct knowledge of the situation told the Post.

Led by billionaire CEO Marc Rowan, Apollo already owns more than a dozen TV stations through its Cox Media Group, as well as a major stake in Legendary Entertainment, a movie and TV production company.

Legendary is a partner in many of Warner Bros.' top film franchises, including "Dune," "Godzilla," and "A Minecraft Movie." Paramount recently signed a multiyear deal to distribute some Legendary films in cinemas, Bloomberg reported last week.

Apollo appears closest to helping David Ellison with the bid, sources told the Post.

Billionaire Stephen Schwarzman's Blackstone, which owns stakes in Hollywood firms including Candle Media has investigated a possible financing role but as of now not interested in participating, sources told the Post.

Complicating matters further for the Ellisons is Zaslav's own restructuring to separate Warner Bros. Discovery into two units: one with his growth businesses, streaming, and studios, and another with his cable properties.