All eyes on Versant
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WBD's tax-free transaction allows each business to pursue bigger deals immediately following the close of this deal, executives told investors Monday.
Why it matters: Even though executives said there's currently no plan to pursue further deals, onlookers speculate WBD could eye a deal with Versant, the publicly traded cable company being spun out of Comcast NBCUniversal.
💸 Yes, but: It's unlikely that Versant would want to take on the debt that comes with the entire WBD Global Networks business, a source familiar with Versant's strategy told Axios.
- It wants to preserve its strong balance sheet to give it flexibility for strategic growth deals.
Zoom in: Versant is looking to acquire assets that will help enhance the offerings across its current portfolio of NBCU cable networks, which can be bucketed into four main genres:
- Political news and opinion (MSNBC)
- Business news and personal finance (CNBC)
- Golf and athletics (Golf Channel and GolfNow)
- Sports and genre entertainment (USA Network, Oxygen, E!, SYFY, Fandango, Rotten Tomatoes and Sports Engine)
🧐 Between the lines: The company is eyeing opportunities to enhance offerings in those four categories, which could be anything from a personal finance company to a digital sports offering.
- That doesn't mean it couldn't one day acquire a cable network that's complementary to its portfolio, but a mass rollup of cable networks isn't in its sights.
🔌 Zoom out: Amid cord-cutting, more entertainment giants are considering offloading their legacy TV assets to focus on streaming.
- Disney CEO Bob Iger in 2023 teased the possible sale of the firm's linear TV assets, including its broadcast network ABC, but later suggested interest in that idea had cooled.
🐭 What to watch: Iger on Tuesday told CNBC amid the spinouts from Comcast NBCU and WBD that Disney's linear networks offer it an advantage over its rivals.
- "I think it gives us a stronger hand to stay in that business," Iger said.
- "We will have, interestingly enough, a linear television business that's paired with a streaming business. So when you think about it, these spinoff companies won't have the assets from a streaming perspective that we will have. Again, I think that gives us an advantage."
