It's now been about two weeks since we learned of the possibility of a merger between Comcast
It's impossible to know how much longer we'll have to wait for a decision on the deal. And while there are definitely potential benefits for both companies, I'd suggest that in the meantime we consider the advantages that Comcast could reap should the merger prove successful.
First, however, let me take issue with a recent BusinessWeek article essentially contending that Wall Street analysts are universally opposed to combining content -- that's movies and TV shows -- with the cable, satellite, or Internet means of distribution. As a former media analyst who covered Comcast and its peers, it's my belief that combining these two parts could actually benefit a number of aspects of the entire video experience. I felt the same way when Comcast courted Disney
Beyond that, one of the intriguing elements of this potential marriage is that it's relatively easy to identify several benefits that would accrue to Comcast, which would take a 51% stake of the operation:
- The sports side of the combination would be beefed up materially, such that it might allow Comcast to compete respectably with ESPN. NBC owns the rights to the Olympics through 2012 and certain NFL games through 2013. Comcast has the Golf Channel, an improving Versus network, and about 11 regional sports networks, including New York, Philadelphia, and Chicago. With more muscle behind its sports effort, Comcast could add more college football games -- which are newly being shown on Versus -- and perhaps ultimately increase its NFL offerings.
- Comcast, which is being challenged by Verizon
(NYSE:VZ), AT&T (NYSE:T), and DirecTV (NASDAQ:DTV), would have more meaningful benefits for its potential customers.
- NBC's content and its partial ownership -- along with News Corp.
(NASDAQ:NWSA)-- of the Hulu online video service would provide Comcast with an increased ability to offer robust programming over the Net.
There are plenty of other angles to this deal, and its conclusion isn't guaranteed. As such, with Comcast's video numbers sliding, I'd watch the action, but not yet place buy orders on the cable giant.
Walt Disney is both a Motley Fool Stock Advisor and an Inside Value recommendation. Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned. He does welcome your questions or comments. The Fool has a disclosure policy.