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Comcast, ViacomCBS Rumors Said To Include Talk Of Something Bigger

Executives for ViacomCBS and Comcast Corp. have been holding discussions that some interpret as laying the groundwork for something bigger.

Speculation about a potential deal has been brewing since before this month’s Allen & Co. retreat for tech and media moguls in Sun Valley, Idaho, where ViacomCBS Chairwoman Shari Redstone and Comcast CEO Brian Roberts were among the notable attendees. Both companies have been under pressure to achieve greater scale, as competitors have struck major deals to propel their streaming services. In May, AT&T announced plans to merge its media business WarnerMedia with Discovery to better compete with Netflix and Disney. That same month, Amazon announced it was buying MGM Studios. In June Amazon and Disney teamed up for a new promotion designed to boost subscribers for both Disney Plus and Amazon Music Unlimited Service.

Executives for the two media companies met about six months ago, when NBCUniversal Chief Executive Jeff Shell got together with ViacomCBS CEO Bob Bakish, though accounts of the reason for the meeting differ. A subsequent meeting in June in New York City brought Redstone, Roberts and Bakish together to discuss how they could partner to accelerate streaming growth globally, according to multiple sources. The Wall Street Journal story  was the first to publish a story about a potential international partnership.

Those initial meetings paved the way to more wide-ranging conversations about other ways the two media companies might work together — talks that sources say could lead to some combination of Comcast’s NBCUniversal unit and ViacomCBS. No formal offers have been made.

“Brian’s a serial acquirer — and he’s far from done,” said one longtime Hollywood investor. “It wouldn’t surprise me if he spun off NBCUniversal and merged it with Shari’s stuff.”

Comcast and ViacomCBS declined comment, though both companies have sought to publicly tamp down speculation about any possible mergers. When asked during the company’s annual shareholder meeting whether he felt Comcast needed to add scale to compete in the rapidly consolidating media landscape, Roberts responded, “We like the hand we have without M&A.” That is similar to the response ViacomCBS CFO Naveen Chopra offered at J.P. Morgan Global Technology, Media and Communications Conference, “We continue to really like our competitive position.”

No deal appears to be imminent. A potential marriage of NBCUniversal with ViacomCBS would pose complicated regulatory hurdles that would likely entail the divestiture of one of the broadcast networks, CBS or NBC. As with Disney’s acquisition of 21st Century Fox, any joining of these media companies would create a film unit with a combined 34 percent of the theatrical box office, according to Comscore.

But it also would amass an arsenal of well-known entertainment assets that would place the combined media company in a better competitive position: bringing together ViacomCBS’ venerable kids’ brand, Nickelodeon, with DreamWorks Animation, say, or its prestigious network Showtime with NBCU’s USA Network, home of the reality show Temptation Island. And it would merge Paramount’s vaunted film library and forthcoming big-budget movies, like Top Gun: Maverick, with that of Universal’s catalog and its high-octane The Fast and Furious franchise.

All of which would seemingly fortify ViacomCBS’ Paramount+ and NBCU’s Peacock streaming services for the digital future. For the moment, each has lagged Amazon’s Prime Video, HBO Max and Disney+ in attracting new subscribers this spring, according to Kantar.

The slow growth of the Peacock service is reportedly a source of frustration for NBCU Chief Executive Jeff Shell, who is unable to match the lavish spending of streaming giants like Netflix or Amazon to buy up content. The marquee event that was intended to launch the service last July, the Tokyo Summer Olympics, was postponed because of the pandemic. This year’s games are destined to be a muted affair, with no spectators in the stands, as the country seeks to combat a rise in coronavirus cases, and at least one prominent sponsor, Toyota, withdrew its TV ads in Japan as the public expresses opposition to holding the games in the country as it reels from Covid-19.

Comcast said Peacock has attracted 42 million “signups” a number that includes those who watch the free, ad-supported service and those who subscribe.

Paramount+ appears to be faring better, thanks to the success of its free Pluto TV streaming service, which ViacomCBS has been using to entice viewers to subscribe to Paramount+. The company said it had 36 million global streaming subscribers at Paramount+ and its other subscription services at the end of its first quarter.

“The handwriting’s on the wall,” said the Hollywood investor. “There’s going to be more consolidation. The world’s going to evolve into six or seven players in the streaming business. They’re all going to be vertically integrated.”

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