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On occasion, there are times where you win by losing. That may be how Netflix is feeling this week amidst the news that Comcast plans to spin off its NBCUniversal Media business from its legacy telecommunications business.
Just as nobody would now say that Accenture lost out by having to surrender the Arthur Andersen name; similarly, in hindsight, Netflix losing the bidding war over Warner Brothers Discovery (WBD) to Paramount Skydance may prove to have been a blessing in disguise. Not having to incur massive debt for an overpriced WBD frees up Netflix — and its pristine balance sheet — to pursue NBCUniversal in due time. Speculation over the value of NBC to Netflix, we have come to understand, is more than idle media gossip.
The logic of a potential deal could not be clearer for Netflix, which would get top quality programming, a chance to fortify freedom of expression and a bounty of creative product that would be informative and entertaining — and enriching to shareholders. It would also be a great cultural fit free of the acrimony of WBD’s demise. As Netflix seeks to expand its business beyond just streaming, it can do everything with NBCUniversal that it tried to do with WBD, but bigger and better.
Indeed, there is a strong case to be made that NBCUniversal is a far stronger business, and a far more synergistic partner for Netflix, than WBD, across all fronts. NBCUniversal pulled in nearly 30% more revenues last year than WBD; it includes a crown jewel asset in Universal theme parks, a highly lucrative cash cow grossing $10 billion in revenues that WBD simply does not possess; and NBC’s strong broadcast network commands massive retransmission fees and has locked-in, prime long-term live sports deals with the NFL and Olympics, a strong contrast to WBD’s melting ice cube of cable networks bleeding revenues. (In fact, they’ve had priceless anchoring in sports with with the NFL, the NBA and the Olympics for over 40 years.)
Finally, Universal Studios has priceless IP library and franchises such as Jurassic World, Fast & Furious, Despicable Me, and its recent theatrical blockbusters such as Oppenheimer, Wicked and the Super Mario movies are just as formidable as the vaunted WBD library.
Furthermore, with legendary Netflix Founder Reed Hastings — who we recently celebrated with our Yale Legend in Leadership Award at our Yale CEO Summit — stepping down as Chair of the Netflix Board, there is a clear opening for a clear candidate. NBCUniversal CEO Mike Cavanagh, whose financial and media savvy is widely respected, could be the perfect successor as Chair of the Netflix Board.
The splitting of media cells
Similarly, the logic of a potential deal could not be clearer for NBCUniversal and Comcast. The media business always goes through some splitting of cells — meiosis and mitosis — but every industry leader concedes that consolidation is especially needed today. Brian Roberts, the widely admired CEO and controller of Comcast, has long been a master acquirer himself, transforming the staid telecommunications company of his father, Ralph Roberts, into a dominant telecoms and media business with the savvy acquisition of NBCUniversal from General Electric at a bargain bottom price in 2011. Indeed, Brian has created hundreds of billions in value for his shareholders and his legacy as one of the greatest business builders and dealmakers of our time is indisputable.
Vanity aside — and purely for credibility and authority on the subject — I would add that I actually knew Ralph Roberts when he was still selling wallets and belts to my family’s men’s clothing store, and I came to know CBS founder Bill Paley at the end of his career. I tracked him down in the 1980s for my book The Hero’s Farewell, about the retirement of Leonard Goldenson, the visionary media baron who, as an attorney, created ABC when the FCC forced its divestiture from NBC in 1942.
Likewise, I have come to know executives at Netflix, such as Reed Hastings, and Disney, such as Bob Iger. For decades, I have known Jeff Bezos whose Amazon is a potential player here, too. The reasoning in this article is my own but I have known the players in media for many years. (This is partly how I came to know Donald Trump so well, when he was hosting The Apprentice on NBC, but that’s another story.)
Know when to fold ’em
But while part of being a great dealmaker is knowing when to consolidate, the other part is knowing when to break things up. To recall those famous lines from “The Gambler” by singer Kenny Rogers, “you’ve got to know when to hold ’em, know when to fold ’em.”
Roberts’ split of Comcast could not be coming at a better time, with NBCUniversal needing greater scale. Comcast’s previous attempt to acquire Rupert Murdoch’s 20th Century Fox was foiled by Disney’s own master dealmaker, Bob Iger, who paid a handsome $71 billion in 2018. For a long time, we have understood that John Malone, the major shareholder behind WBD, had pushed for some kind of partnership between WBD and NBCUniversal; but with the Ellisons buying WBD, it became apparent that now was the right time to liberate NBCUniversal.
The leadership of Netflix is uniquely positioned to bring NBCUniversal into a new lifestage, as they uniquely know how to revolutionize the business of both media and technology. For many years, there was the presumption that content and pipeline/distribution companies should never come together, a lesson well borne out by history.
In the mid-1990s, the regional telephone monopolies launched rival consortia such as Tele-TV and Americast, hoping to dominate the living room by pairing their massive distribution networks with original Hollywood programming. Those multibillion-dollar efforts spectacularly imploded.
And historically, even when companies controlled both the pipes and the programming, the underlying economics have eventually torn them apart. Time Warner used to own both premium networks such as HBO and CNN as well as the massive Time Warner Cable distribution pipes, but because the industry relies on “carriage fees”—the per-subscriber tax distributors pay to network owners—Time Warner’s content executives couldn’t aggressively raise their prices without directly crushing their own cable division’s profit margins. This resulted in Time Warner spinning off Time Warner Cable in 2009, permanently severing pipes from programming.
Netflix shattered that presumption, though, reinventing the entertainment business model, amassing 325 million paying households worldwide as of 2025, generating nearly $42.5 billion in annual revenue in the process. Already, they have demonstrated success in growing beyond streaming, including locking down a 10-year, $5 billion mega-deal for live WWE broadcasts and securing marquee sporting events such as live NFL holiday games and the MLB Home Run Derby.
Sometimes the best deal is the one you don’t make
Some analysts have speculated there may be regulatory hurdles to a tie-up between Netflix and NBCUniversal, but that is far too premature. The tax-free spinoff of NBCUniversal from Comcast is not scheduled to close for another year and nobody can acquire NBCUniversal for another two years after that unless they want to foot a massive tax bill, by which time it will likely be a different president, a different FCC commissioner and a different FTC/DOJ Antitrust head. By that time, Brendan Carr will likely be last year’s model, obviating the need for any Carr insurance, as he is joined in retirement by Lina Khan on the far left.
Sometimes, the greatest deal a company can make is the one they walk away from — until the perfect one falls right into their lap. Forty years ago, in The Hero’s Farewell, I discussed how Leonard Goldenson ran ABC as a benevolent monarch for 34 years, for a while including Paramount, before selling it to Capital Cities in 1984, presciently telling us that media companies have more simultaneous fluidity in regulatory, consumer and technological frontiers than any other sector.
In the summer of the next year, 1985, NBC tried to tie down 89-year-old comedian George Burns with a five-year contract. He told me, “I can’t do that, how do I know they’ll be around in five years?”
Ironically, four months later, NBC sold out to GE but Burns the centenarian lived on for another decade, telling the same great jokes. Business life stages and reinvention of character are very different from human life stages — especially in media.
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