While Brian Roberts continues to build his own magical realm, it is mostly an illusion for stockholders. Comcast's boss is intensifying competition with Walt Disney as the company's new theme park approaches its grand launch. However, the valuation of the cable and entertainment giant suggests that investors are hesitant to join the ride.
Orlando will welcome Epic Universe, its first sizable entertainment complex in over 20 years, when it opens next year. Comcast is investing an approximate $6 billion in brand-new immersive experiences featuring Harry Potter, Super Mario from Nintendo, and the How to Train Your Dragon franchise.
The source of Roberts' ambition can be found in his failed hostile takeover effort of Disney two decades ago. NBC Universal and its extensive activities were instead taken over by Comcast. The plan was to optimize the space by combining the pipes that supply internet and cable TV with the entertainment they carry under one roof. Meanwhile, rivals like Time Warner were taking the opposite approach, demolishing their empires.
Convincing shareholders of the benefits of the consolidation has proven difficult, given the apparent value of Comcast's separate subsidiaries. Based on projections received by LSEG, its cable, internet, and wireless division is projected to produce $34 billion in EBITDA in the upcoming year. Comparable assets held by Comcast would be valued at almost $210 billion if they were traded at the same multiple as Charter Communications, which is a little over six times.
Applying the same approach to NBC's TV and streaming divisions and using Fox as a benchmark results in a further $20 billion. If evaluated comparably to Lionsgate Studio in its ongoing agreement to go public through a shell-company acquisition, the Oscar-winning studio behind "Oppenheimer" would be worth almost $14 billion. Lastly, $3.9 billion in EBITDA is predicted for theme parks in the upcoming year. Their estimated worth is $40 billion, which is a little more than what Six Flags Entertainment charges. Comcast's sprawl comes to about $280 billion when corporate costs are subtracted.
In a sense, this speculative amount assigns no value to the theme parks but rather a premium of almost $40 billion, or 17%, to where investors value the Comcast organization. From a different angle, it appears that Roberts receives little to no credit for the non-cable and internet assets because he trades at the same multiple as Charter. Less than 5% of EBITDA and one-third of revenue from the previous year came from the media industry, which is often valued higher elsewhere. Comcast's universe isn't particularly spectacular when it comes to money.