Speaking on CNBC, he thinks it’s possible in a few years that Comcast and AT&T will sell some of their entertainment assets -- even ones recently acquired.
For AT&T, he believes DirectTV (“a terrible acquisition”) and WarnerMedia (“there’s problematic parts of that business”) could be let go.
At same time, he says Comcast really hasn’t found a “synergistic” reason why NBCU should remain with the company -- though financially it continues to be OK. “[NBCU] has secular challenges like WarnerMedia.” And concerning Comcast’s recent Sky purchase, there is "no EBITDA growth” or “secular headwinds.”
Overall, at these companies, “the diversification strategies are not working,” says Moffett.
He says there seems to be an industry direction in which both Comcast and AT&T’s respective TV-movie content companies -- NBCU and WarnerMedia -- could be spun off and merged.
This would leave both Comcast and AT&T more focused on their
respective core businesses -- cable operations-broadband-mobile and communications-mobile-
By way of comparison, Moffett cites Charter Communications, another big cable/communications company. It didn’t get into a big TV/movie acquisition pursuit, and has seen growing success -- financially and with its stock price.
Since January 2011, Charter’s stock is up 1359% versus Comcast stock, 443% growth. To a lesser degree, Verizon also avoided buying a big content acquisition, something which kept it on a better track, says Moffett.
Moffett’s speculation is that a NBCU/WarnerMedia merger might work now -- in a somewhat different regulatory environment. We’d add this: Think about Walt Disney buying half of 21st Century Fox or more recently, Viacom and CBS. Regulators had few issues with these deals.
Also, he says, it wasn’t that long ago regulators made it difficult for DirecTV and Dish Network to merge. Now, it’s a different environment in the cord-cutting media marketplace.
Even though the marketplace is still volatile, the market could have slower-than-expected changes to the traditional TV and theatrical film businesses, with only a few top media companies having a chance to come together.
What about those “horizontal” diversification deals -- buying non-entertainment content companies buying media companies? That seems like a thing of the past.