New York developer and NBC reality-TV personality-turned-President-elect Donald Trump "has bashed (Comcast Corp.'s) NBC news as biased, inaccurate and bad," cast contempt on Comcast's BuzzFeed and Saturday Night Live products, and "went so far as to say he would not have allowed Comcast's acquisition of NBCUniversal," notes bond analyst Dave Novosel, in a report to clients of Gimme Credit LLC.
But "despite the tough talk, we think it is likely that the Trump administration will be more lenient, from a regulatory perspective," should Comcast boss Brian Roberts be tempted to again attempt multibillion-dollar acquisitions, Novosel added.
Comcast is in a strong place to fund deals, if it so inclines. The company collected $21 billion in free cash flow above costs over the past three years, and was able to spend a full $16 billion of that to buy back shares, propping up the stock price.
Novosel calls it "unlikely" that Comcast will divert that flow by attempting blockbuster combinations with T-Mobile, Sprint, Verizon or Charter. More likely it will try to buy more wireless spectrum, whose price in the recent government auction are off previous highs.
Comcast has been spending 11%-12% of its revenues on capital expenditures, such as expanding its Wi-Fi network and updating select aging parts of its network, Novosel notes.
That still leaves plenty of room for the kind of more-modest acquisitions Comcast has pursued since its TimeWarner cable deal was shot down: the company has spent a little more than $6 billion in the last three years on acquisitions, including $3.8 billion for DreamWorks Animation.
Without the Olympics or Hillary Clinton campaign ads, TV ad revenues will likely be down this year, but Comcast theme parks "continue to cruise," retransmission fees are up, Business Services sales and internet revenues are growing strongly.