It started out as a joke. Probably, anyway. The joke began when Donald Trump Jr. reached out to Elon Musk, CEO of Tesla (TSLA), and said, “Hey @elonmusk, I have the funniest idea ever!!” Trump then linked to a recent article about Comcast’s (CMCSA) move to spin off most of its television channels into a separate operation.
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Musk then responded, “How much does it cost?” And that prompted Joe Rogan to get in on the action, and ask for Rachel Maddow’s job, promising to “wear the same outfit and glasses,” and even to, as Rogan himself put it, “tell the same lies.” The odds of Musk actually buying the channels in question are pretty remote, but while you’re recovering from your turkey feed, or possibly looking forward to it, depending on what time you read this, consider with me if you will…what would happen if Elon bought the Comcast channels?
Assuming Musk could even pull it off, possibly by offering Comcast the entire $7 billion that it was looking to put into what is currently known as “SpinCo,” he would then have a set of options from there. Naturally, the deal would be scrutinized like a hawk, and with current Federal Trade Commission head Lina Khan, it might be a no-go from the start. But under a much friendlier Trump administration, well, conditions are much more favorable. But three options immediately spring to mind as possibilities.
Status Quo
Musk could leave the cable channels as part of cable lineups everywhere, deriving profit from advertising sales, merchandising tie-ins, and anything else that cable channels do. He could even introduce his own advertising for Teslas, for Boring Company products like the infamous flamethrower, or anything else he pleased.
And, of course, he could replace Rachel Maddow with Joe Rogan or make any other operational changes he might wish in the interim. This, however, seems unlikely. After all, much of the reason that Comcast was looking to spin off the cable channels, to begin with, is related to the decline of linear television in the face of the growing streaming phenomenon.
Throw in the fact that some analysts are looking for Skydance to do the same under Paramount (PARA), and the fact that both Disney (DIS) and Warner Bros Discovery (WBD) both took significant earnings hits from their cable channels, and the idea of wide-scale divesting seems reasonable. Which, interestingly, brings us to point two.
A New Streaming Giant
If Musk kept the channels, then he also would likely keep the content they had. Remember the channels Comcast was losing: USA Network, SyFy, Oxygen, E!, and the Golf Channel, among others. These channels have their own internal agreements as far as content licensing goes, of course. Each also has a quantity of original programming to it.
Musk could potentially take that content and turn X into a streaming platform. This would also give said streaming platform access to a lot of content that has not been available for years. Remember the short-lived SyFy game show Estate of Panic? Currently, it cannot be found on any other platform. Who would subscribe to Musk’s platform if that content were once again available?
This may or may not work out so well; an agreement to buy the channels may not come with content or content available for a streaming platform. But given that Comcast’s channels were already suffering—both CNN and MSNBC came in behind The Hallmark Channel in recent ratings—they may not be in a position to fight very hard.
A Completely Different Streaming Giant
The streaming plan is a good one, but what if Musk does not want to get into the streaming business? Instead, he could turn around and license all that content out somewhere else. Like…perhaps…another nascent social media giant? Say…Truth Social (DJT)?
Truth Social has a good cash load behind it right now, seeing as how its primary shareholder is a billionaire and the President of the United States. Musk could take all that content and offer it up to Truth Social, which we know from earlier reports has been looking to start a streaming alternative, offering complete protection for free speech to its content providers.
But content is not easy to come by, particularly in the quantities a streaming platform requires to draw monthly subscribers. The Comcast channels would have that much ready to go, and Musk could offer it up…for a fee. But in the end, this is all supposition. A fanciful tale for a post-turkey-coma in the United States, albeit just another Thursday in the rest of the world.
Is Comcast Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CMCSA stock based on 12 Buys and eight Holds assigned in the past three months, as indicated by the graphic below. After a 5.29% rally in its share price over the past year, the average CMCSA price target of $49.47 per share implies 16.24% upside potential.
