In the near term, expect Comcast (NASDAQ: CMCSA) to focus on bite-sized acquisitions, such as last week's purchase of advanced advertising startup Visible World, rather than large mega-mergers, such as the scrubbed $45 billion Time Warner Cable (NYSE: TWC) purchase.
With regulatory disapproval of the latter deal revealing a current Beltway attitude towards Comcast that is decidedly wary about the cable conglomerate getting much bigger, analysts believe Comcast will lay low, acquisitions-wise, at least until a new president takes office in 2017.
"Comcast is likely sidelined for the time being for any material transactions. Even large content deals would be a tough sell," telecom analyst Craig Moffett said. "That could force them to look overseas. But for now, they don't have to do anything at all. They are performing very well, and they still have lots of organic growth opportunities to pursue."
Comcast's hometown newspaper, the Philadelphia Inquirer, found the environment in Washington, D.C., irritated by bold attempts to merge with TWC, which occurred as Comcast was failing to fulfill the terms of of its last big deal, the 2011 acquisition of NBCUniversal.
Washington is "really annoyed with Comcast. Obviously, it's political," John Tinker, media analyst with the Maxim Group, told the Inquirer. "They are in the penalty box. The issue is how long they will stay in the penalty box."
Tinker said Comcast should "stay low for a year and a half," or at least for the rest of the Obama administration.
"It's something that they have to be thinking about," he explained. "A year and a half is not a long time. [CEO] Brian [Roberts] will be around at the end of next November. Obama won't."
For more:
- read this Philadelphia Inquirer story
- read this MoffettNathanson memo (sub. req.)
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