Media consolidation has been rife in the past two years, as traditional media companies have scaled up in order to protect themselves against the new entrants challenging their business.
Traditional media has spent $229 billion since March 2018 on just six key mergers as rivals opted to combine their assets to compete in the new media world. With the close of the CBS-Viacom merger, the chance for a future mega deal between two media giants have diminished.
This sentiment was echoed earlier this week by LionTree CEO Aryeh Bourkoff, a leading dealmaker in the media sector. Speaking in a recent interview, Bourkoff said “The last decade has been characterized by frenetic [mergers & acquisitions] to reach scaled platforms. That mountain has been climbed. Now, we are going to be level-setting into 2020 and over the next decade, where we’ll have a slowdown of that trend.”
Bourkoff’s opinion is that media companies have now reached the size that they need to compete with subscription streaming. This may not be the case. Disney aside, it’s hard not to argue that AT&T, Comcast or ViacomCBS would be better off to compete at scale if they also owned AMC Networks’ scripted shows or MGM’s movie library.
Certainly, major acquisitions are likely over for media. Of the independent media companies left, potentially only Cox Communications, Dish, Roku and Sony Pictures are worth a double-digit billion dollar deal, and none would likely match the value of the mega AT&T and Disney deals.
It’s also difficult to imagine anyone other than ViacomCBS being allowed by the U.S. Justice Department to be allowed to purchase additional MVPDs, and it’s doubtful ViacomCBS would want to enter that industry. This doesn’t mean consolidation within media is over. The remaining media conglomerates will consider adding smaller studios and available networks. Roku’s connected TV advertising business is an attractive proposition for many. An SVOD service buying a studio to avoid expensive licensing deals isn’t out of the question. What likely is over is the era of the mega media deal.
This is one of a series, 19 Trends That Defined the Media Business in 2019.