Comcast Focused on Growth Investments, Not M&A: “It’s in Our DNA”

A big Wall Street spotlight, once again, was on Comcast‘s latest M&A commentary on Thursday as the conglomerate discussed its first-quarter earnings. As M&A chatter swirls around such sector players as Paramount Global, president Michael Cavanagh, a former banker who noted that he has been with the company for nearly 10 years now, once again signaled a core focus on investments in existing businesses with upside rather than potential acquisitions.

“The idea of taking our well-generated capital across our businesses and, first and foremost, investing them back in the business with a very long-term view of what the future can be, where there’s expected return – whether that’s the parks business, whether that’s the broadband network, whether that’s streaming, whether it’s just broad innovation – I think it’s in our DNA” at this point, the Comcast executive emphasized during the earnings call.

Management’s focus is on figuring out “ways to invest wisely for the future, while at the same time maintaining a very strong balance sheet,” he explained. “And we like the way the balance sheet is set up. When you go through these long, long arcs of change across industries with disruption, it allows you to sleep better at night, knowing the strength of the balance sheet we have.”

In addition to those two priorities, Cavanagh highlighted capital returns to shareholders. “Not many companies are inclined to manage those three priorities as much as we are, and I can commit to that,” the Comcast president concluded. “That’s where our head is as we look forward to the next 10 years ahead.”

Asked by an analyst about potential investments in gaming and other growth sectors and areas, Cavanagh said: “The success that we’ve had across parks and experiences lead us to plenty of opportunities to think about gaming and other other areas around live entertainment that go around and cross between our businesses. So we experiment with things … it’s our job to see if there are great opportunities to do that, but nothing to report today.”

Given Comcast’s long history of big acquisitions, including the likes of NBCUniversal, cable giant AT&T Broadband and European pay-TV firm Sky, Wall Street observers have often kept eyes and ears open for possible signs of any involvement of the company in major M&A. Some investors and analysts have in the past expressed concern that Comcast could end up shelling out big bucks for assets on the block, and spend time and energy on integrating them.

“While there may be speculation what we could do next, I’d like you to hear it directly from me. I love the company we have,” Roberts had emphasized in late January amid chatter about a possible Warner Bros. Discovery combination. “So the bar continues to be even higher for us to do anything.”

Speculation over a potential NBCUniversal-Paramount Global merger was also previously raised when Comcast unveiled an agreement to form the SkyShowtime joint venture with Paramount in more than 20 European markets to roll out a joint streaming service.

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