MERGER DEAL NEGOTIATION

ACTIVITY
FIN 506: Business Finance -I

Submit to: Dr. Mohsin Khuwaja

Group members:
Sukaina Salman
Sania Saeed
Ayesha Murad
Comcast corporation provides multi channel distribution (MSNVBC, CNBC, USA network) that
enables large number of audiences. The analysis provides the failed negotiations of Comcast
with Netflix to create a merger, followed by the strengths of comcast.

Outcome of the merger:

No official agreement was made between comcast and Netflix. There were several conflicts
between negation requirements given by the comcast Boad of directors.
1. Netflix was not ready to provide 55% ownership share to the merged company, as stated
by Netflix that they were higher revenue generating. But it can be evident from the
figures that comcast has high income after tax, which is evident that it had diverse
revenue streams that helped them mitigate the impact of business. Even though they
were reluctant to have 50-50% share.
2. Moreover, Netflix didn’t support the idea of titling the merged company as comflix,
where the initials were of Comcast. Instead, they came up with the idea of Netcast.
however, for this name allocation our members were what agreed to.
3. Netflix was not ready to appoint existing comcast corporation CEO as the CEO of the
merged company.
4. Comcast has high dividend payout ratio, which indicates that comcast earnings are
enough to payout dividends as compared to Netflix with 0 dividend payout ratios.
5. Instead of giving 50% of Netflix current and future original film and television series
content to be accessible to broadcast on NBC free-to-air, they argue to air only one
episode free over the comcast channel.
Comcast's strengths:

1. Broad Infrastructure: Comcast's broad infrastructure is a cornerstone of its operations,

enabling the company to deliver a comprehensive range of services across various sectors of the
communication and entertainment industry. With a multifaceted network spanning cable,
internet, and telecommunications services, Comcast stands as a leading provider renowned for
its extensive coverage and unwavering reliability.

In tandem with its cable television offerings, Comcast's internet infrastructure comprises a state-
of-the-art network designed to deliver high-speed broadband connectivity to residential and
business customers alike. Leveraging a combination of fiber-optic cables and advanced
networking technologies, Comcast provides reliable internet access capable of supporting
bandwidth-intensive activities such as streaming, online gaming, and remote work. This
expansive internet infrastructure facilitates seamless digital experiences for users, fostering
connectivity and productivity in an increasingly interconnected world.

2. Diverse Offerings: With a range of services such as cable TV, internet, home security, and
telecommunications, Comcast appeals to a broad customer base, catering to various needs and
preferences.

3. Innovation: Comcast continually invests in technological advancements and innovation,

staying competitive in an ever-evolving industry by offering cutting-edge products and services,
such as Xfinity X1 and Xfinity Flex.Comcast Corporation. Potential Analysis & Strategy

Potential benefits Comcast may offer over Netflix:

1. Live TV and Cable Packages: Comcast offers traditional cable packages with access to live TV
channels, including news, sports, and entertainment content. While Netflix primarily focuses on
on-demand streaming of movies, TV shows, and original content, it doesn't offer live TV channels
in the same way Comcast does.

2. Bundle Options: Comcast often provides bundle options that include internet, cable TV, and
home phone services. This bundling can sometimes offer cost savings for customers who need
multiple services, whereas Netflix focuses solely on streaming content without offering
additional services like internet or phone.

3. Exclusive Content: While Netflix is known for its extensive library of original content, Comcast
may have exclusive deals with certain networks or studios, providing subscribers access to shows
and movies that are not available on Netflix.

4. On-Demand Viewing of Current TV Shows: Comcast's on-demand service typically allows

subscribers to access the latest episodes of current TV shows shortly after they air, which may
not always be immediately available on Netflix.

5. Integration with Other Comcast Services: For customers who already use Comcast for internet
or phone services, there may be added convenience in having all services managed through a
single provider.

Benefits Netflix may get from Comcast after the merger:

Content Expansion: Comcast's NBCUniversal content library (TV shows, movies, sports) would
vastly expand Netflix's offerings, making the combined service more attractive against
competitors like Disney+.
Cross-Selling Opportunities: Comcast could bundle Netflix subscriptions with its existing Xfinity
cable and internet packages, boosting both subscriber bases.