Rohan’s view
Brian Roberts spent 24 years building Comcast into one of the largest conglomerates in the US, a juggernaut that owned the media on your screen, the pipelines that delivered it, and the platforms that served it up to you. Now Comcast is poised to undo all of it.
The $85 billion company is breaking up the empire into two different businesses discretely focused on connectivity and content. It’s not because the conglomerate model is dead — as SpaceX, Amazon, and Nvidia have all shown — but because this version of the conglomerate doesn’t work in the Trump era.
For one, there’s no upside to owning the pipes and the studio. And if you’re trying to survive and grow, why bother with the political, regulatory, and public-relations headaches that owning a media company brings under this administration?
AT&T was early in seeing the writing on the wall: After spending $85 billion to buy Time Warner in 2016, it realized it didn’t want to be bothered with studio executives or what its CNN anchors said on TV. Comcast tried a micro version of this, spinning off its terminally declining and politically fraught cable assets last year. Warner Bros. Discovery, for a moment, was moving in the same direction — and is currently dealing with the implications for not sticking on that path.
Those headaches were worth it when scaled media businesses threw off gushers of cash and provided a cultural imprimatur that few other assets could. But Roberts has served as the target of Trump’s ire so many times that it’s become hard to get deals done in what Goldman Sachs President John Waldron has termed an era of “endgame consolidating.”
To maintain a tax-free spinoff, Roberts has to wait on doing a big deal for now (he told investors Monday that M&A was “absolutely not” on the table in the short term.) But big deals are in the offing — Charter shares surged Monday as investors bet on exactly that.
Business — and dealmaking — is an endless cycle of bundling and unbundling, as one momentary media mogul said. And Comcast has just unshackled itself from a media business that was weighing it down.
Notable
- David Ellison has taken a decidedly contrary tack: Paramount is hell-bent on owning CNN, for the lingering cultural influence it retains, especially with the Programmer-in-Chief.