News of Warner Bros. Discovery and Paramount talks around a potential merger could push NBCUniversal owner Comcast into making its own move to consolidate the sector, analysts have said.Rumours surrounding a tie-up between Warner Bros. Discovery and Paramount, amid broader industry consolidation, have been swirling for months but news this week that CEO’s David Zaslav and Bob Bakish suggested the process was picking up pace.Comcast’s Brian Roberts, the US telco giant’s CEO, has been rumoured as a proponent of expanding its media and entertainment empire and analysts at MoffettNathanson said using its heft to acquire Warner Bros. Discovery could provide more viability to a deal that a tie-up with Paramount.While Warner Bros. Discovery is valued at around $28bn and Paramount at $10bn, even a combined entity would still be a far smaller competitor to Netflix, which is currently valued at $215bn.Comcast, however, is valued at almost $180bn.“At the end of the day, Comcast may be the one strategic buyer with the capital structure and assets required to benefit either Warner Bros. Discovery or Paramount in a long-term viable way,” said MoffettNathanson analysts.On the Paramount & Warner Bros. Discovery tie-up, analysts were largely dismissive and suggested an enlarged entity would not benefit either company.“[The potential deal] looks like a play for survival at all costs,” said Ben Barring at Quilter Cheviot.“Both businesses are heavily indebted and it is likely further debt will need to be issued to make this deal possible.”LightShed Partners analyst Rich Greenfield told CNBC that the deal reflected the decline of TV advertising and the fact that the industry “is realising that there are no green shoots in TV advertising. It’s never, ever getting better”.Greenfield added: “How bad are numbers for Q4 for this industry. Putting these companies together is not the right answer. Merging is not the answer.”
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