Comcast Should Buy Viacom, Time Warner, Or Scripps

One of the leading media investing firms in the US, Gabelli & Co. wants cable outfit Comcast (NASDAQ:CMCSA) to stop its pursuit of GE’s (NYSE:GE) NBCU and turn its focus on better run media companies with stronger assets. That would include, in Gabelli’s opinion Viacom (NYSE:VIA), Time Warner (NYSE:TWX),  Scripps Interactive (NYSE:SNI)

Gabelli & Co. analyst Chris Marangi said. “Viacom has everything Comcast wants and none of what it doesn’t want.”

Gabelli is right. The buy-out of NBCU is going to be a complex transaction that will involve purchasing the 20% of NBCU  that Vivendi owns. According to sources, it would also involve GE and Comcast contributing assets and cash in a deal under which the cable company would own 51% of the new venture and the conglomerate 49%. NBCU has a TV network which is considered a dinosaur in the current media landscape.

Viacom, Time Warner, and Scripps have a larger part of their assets in cable programming which has turned out to be one of the most profitable segments of the media business. Each also has important online assets while NBCU’s presence in that part of the market is weaker.

Comcast faces an uphill battle to convince its shareholders that a complicated deal with GE will be financially successful. Viacom Chairman Sumner Redstone, who also control CBS (NYSE:CBS) is in his eighties. Redstone may want to cash out and Comcast has the financial resources to help him

Douglas A. McIntyre