Occasionally there are times when you win by losing. Maybe that’s how it is Netflix feels this week amidst the news that Comcast plans to spin off its NBCUniversal Media business from its legacy telecommunications business.
Just like no one would say that anymore Accenture lost because he had to give up the name Arthur Andersen; Similarly, Netflix subsequently lost the bidding war for Warner Brothers Discovery (WBD). Of utmost importance Skydance could prove to be a blessing in disguise. Since an overpriced WBD doesn’t require taking on massive amounts of debt, Netflix – and its pristine balance sheet – has the opportunity to go after NBCUniversal when the time comes. speculation What we’ve come to realize about NBC’s value to Netflix is that it’s more than just media gossip.
The logic of a potential deal for Netflix couldn’t be clearer: The company would get top-notch programming, a chance to strengthen free speech, and a wealth of creative products that would be informative and entertaining—and enriching for shareholders. It would also be a great cultural addition, without the poignancy of WBD’s demise. As Netflix looks to expand its business beyond just streaming, it can do with NBCUniversal everything it tried with WBD, only bigger and better.
In fact, there’s a strong case to be made that NBCUniversal is a far stronger company across the board and a far more synergistic partner for Netflix than WBD. NBCUniversal generated nearly 30% more revenue than WBD last year; That includes a crown jewel in the Universal theme parks, a highly lucrative $10 billion cash cow that WBD simply doesn’t have. and NBC’s powerful broadcast network charges huge retransmission fees and has secured premium, long-term live sports deals with the NFL and the Olympics, a stark contrast to the melting ice cube of WBD’s cable networks, which are eroding revenue. (In fact, they have had an invaluable foothold in sports for over 40 years with the NFL, the NBA and the Olympics.)
After all, Universal Studios has a priceless IP library and franchises such as: Jurassic world, Fast and Furious, Despicable Meand his recent cinema blockbusters like Oppenheimer, Evil and the Great Mario Movies are just as impressive as the acclaimed WBD library.
In addition, with the legendary Netflix founder Reed Hastings, who we recently celebrated with our Yale Legend in Leadership Award At our Yale CEO Summit – the resignation as chairman of the Netflix board – there is a clear position for a clear candidate. NBCUniversal CEO Mike Cavanagh, whose financial and media savvy is widely respected, could be the perfect successor as Netflix’s chairman.
The division of the media cells
Likewise, the logic of a potential deal for NBCUniversal and Comcast couldn’t be clearer. The media business always goes through some degree of cell division – meiosis and mitosis – but every industry leader acknowledges that consolidation is particularly necessary today. Brian Roberts, the widely admired CEO and controller of Comcast, has long been a master acquirer in his own right, transforming his father Ralph Roberts’ staid telecommunications company into a dominant telecommunications and media company with the shrewd acquisition of NBCUniversal from General Electric at a bargain price in 2011. In fact, Brian has created hundreds of billions in value for his shareholders, and his legacy as one of the greatest business founders and dealmakers of our time is undeniable.
Vanity aside – and purely for the sake of credibility and authority in the field – I would like to add that I actually knew Ralph Roberts when he was still selling wallets and belts to my family’s men’s clothing store, and that I met CBS founder Bill Paley at the end of his career. I tracked him down for my book in the 1980s The hero’s farewellabout the retirement of Leonard Goldenson, the visionary media baron who, as a lawyer, founded ABC when the FCC forced its spinoff from NBC in 1942.
I also met executives at Netflix like Reed Hastings and Disneylike Bob Iger. I’ve known Jeff Bezos for decades Amazon is also a potential player here. The argument in this article is mine, but I have known the actors in the media for many years. (That’s partly why I got to know Donald Trump so well when he hosted The apprentice on NBC, but that’s another story.)
Know when to fold them
But while part of being a good dealmaker is knowing when to consolidate, the other part is knowing when to break things up. To recall the famous lines from singer Kenny Rogers’ “The Gambler”: “You gotta know when to hold ’em and know when to fold ’em.”
Roberts’ spinoff from Comcast couldn’t come at a better time, with NBCUniversal in need of greater reach. Comcast’s previous attempt to acquire Rupert Murdoch’s 20Th century fox was thwarted by Disney’s own master dealmaker Bob Iger, who paid a hefty $71 billion in 2018. We have long known that John Malone, WBD’s major shareholder, had been pushing for some sort of partnership between WBD and NBCUniversal; But when the Ellisons bought WBD, it became clear that now was the right time to free NBCUniversal.
Netflix’s leadership is in a unique position to lead NBCUniversal into a new phase of life because of its unique understanding of how to revolutionize the media and technology business. For many years, the prevailing assumption was that content and pipeline/distribution companies should never come together, a lesson well-supported by history.
In the mid-1990s, regional telephone monopolies formed competing consortia such as Tele-TV and Americast, hoping to dominate the living room by coupling their vast distribution networks with original Hollywood programming. This multi-billion dollar effort failed spectacularly.
And even when companies controlled both the lines and the programming in the past, underlying economic factors eventually tore them apart. Time Warner previously owned premium channels like HBO and CNN as well as the massive distribution channels of Time Warner Cable. But because the industry relies on “carriage fees” — the per-subscriber tax that distributors pay to channel owners — Time Warner’s content managers couldn’t aggressively raise their prices without directly cutting into their own cable division’s profit margins. This led to Time Warner spinning off Time Warner Cable in 2009, permanently parting ways with the program.
However, Netflix debunked that assumption by reinventing the entertainment business model, amassing 325 million paying households worldwide as of 2025, generating nearly $42.5 billion in annual revenue. They’ve already shown success in growing beyond streaming, including securing a 10-year, $5 billion mega-deal for live WWE broadcasts and securing major sporting events like live NFL Christmas games and the MLB Home Run Derby.
Sometimes the best offer is the one you don’t make
Some analysts have speculated that there could be regulatory hurdles to a merger between Netflix and NBCUniversal, but that is far too premature. NBCUniversal’s tax-free spinoff from Comcast isn’t scheduled to be completed for another year, and no one can acquire NBCUniversal for another two years after that unless they want to pay a huge tax bill. By then, it will likely be a different president, a different FCC commissioner, and a different FTC/DOJ antitrust chief. At this point, Brendan Carr will likely be last year’s model, so no need for Carr insurance as Lina Khan is retired to the far left of him.
Sometimes the best deal a company can make is the one it stays away from – until the perfect deal falls right into its lap. Forty years ago, in The hero’s farewellI talked about how Leonard Goldenson ran ABC as a benevolent monarch for 34 years, including Paramount for a while before selling it to Capital Cities in 1984, presciently telling us that media companies are simultaneously more flexible at regulatory, consumer and technology boundaries than any other sector.
The next summer, 1985, NBC tried to sign 89-year-old comedian George Burns to a five-year contract. He told me, “I can’t do that, how do I know they’ll still be around in five years?”
Ironically, NBC sold out to GE four months later, but Burns, the centenarian, lived on for another decade, telling the same great jokes. The stages of business life and character reinvention are very different from the stages of human life – especially in the media.
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