Media Buzz: Comcast May Bid For ViacomCBS and Roku

Shares of ViacomCBS Inc. and Roku Inc. gained on speculation that Comcast Corp. might make a bid for one of the companies, extending a string of media-industry deals.

Bloomberg reports Comcast Chief Executive Officer Brian Roberts has considered a transaction with ViacomCBS or an acquisition of Roku, the Wall Street Journal said Wednesday, citing an unidentified person familiar with the matter. But the CEO has told people close to him that he doesn’t need to seek a merger, the newspaper reported.

The story sent shares of ViacomCBS up 2.7% to $41.84, their biggest one-day gain in almost a month. Roku, which sells equipment for streaming services, climbed 4.5% to $421.70.

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The speculation follows a flurry of merger activity, including Amazon.com Inc.’s $8.45 billion acquisition of Metro-Goldwyn-Mayer and AT&T Inc.’s agreement to combine its WarnerMedia division with Discovery Inc. ViacomCBS itself was created out of a merger of Viacom and CBS completed near the end of 2019.

The deals have raised questions about Comcast’s future. The cable giant owns NBCUniversal, a sprawling entertainment operation that includes TV and movies. But its Peacock streaming service is playing catch-up with Netflix Inc. and Walt Disney Co. Roberts is grappling with whether to buy something or build from within to become a streaming powerhouse, the Journal reported.

Comcast declined to comment. Executives at the Philadelphia-based company have said recently that they’re happy with their portfolio of assets and don’t need to buy another company.

On the distribution side, The Wall Street Journal reports Roberts is aiming to make Comcast a rival to Roku and Amazon in delivering streaming apps into living rooms, just as it has long delivered cable TV channels, people close to him said. Under a plan known internally as PlatCo, Comcast is working with Walmart Inc. and Chinese manufacturer Hisense to develop smart TVs that could be in stores later this year, some of the people said.

On the content side, Roberts is pressing NBCUniversal to be more aggressive with Peacock, which has been successful at generating advertising revenue but is far behind industry leaders in subscriptions. Peacock offers a $9.99-per-month ad-free tier and a $4.99-a-month ad-supported option. Comcast cable and internet customers get the service at no extra charge.

Comcast said in late April that Peacock had 42 million sign-ups. But fewer than 10 million consumers paid for the service as of May, according to one of the people close to the company. Netflix had about 208 million global subscribers as of the first quarter and Disney had 103.6 million world-wide.

Roberts plans to increase spending on streamed programming considerably, the people close to the company said. Comcast said it was spending $2 billion on content for Peacock over its first two years, while Netflix plans to spend $17 billion this year alone.

“The way Netflix and Amazon spend money doesn’t come naturally to Brian, which is perhaps Comcast’s biggest challenge going forward,” said Ted Harbert, a former NBC chairman who left NBCUniversal in 2016 after nearly two decades. Including the traditional TV and movie business, Comcast said it spends more than $20 billion on content annually.