Media companies likely to pursue M&A opportunities thanks to spin-offs
Media companies likely to pursue M&A opportunities thanks to spin-offs
Comcast and Warner Bros. Discovery both announced moves to spin off their cable networks in recent weeks.
With 2025 coming up fast, legacy media companies are plotting their future moves. Comcast and Warner Bros. Discovery have both announced plans to split their cable networks from other parts of their business in recent weeks, and the moves clearly point to desires by both companies to pursue more merger and acquisition opportunities in the near future.
Key Details:
- The new cable channel entities at Comcast and WBD could pursue deals with AMC or other linear outlets.
- The companies could also work on new streaming deals for Max and Peacock.
- Many analysts believe a new presidential administration could lead to fewer regulatory hangups.
It’s likely that media executives are smelling deals in the air. WBD CEO David Zaslav has long been an advocate of more consolidation and bundling in the industry, and he made sure his company was pursuing that philosophy when it announced this week that it would be separating its cable channels from its movie studio and streaming segments.
Comcast did likewise in late November, and the moves leave both companies with plenty of flexibility. If they want to try to snap up other struggling linear outlets like AMC Networks, for example, their TV arms could pursue such opportunities without worrying as much about a drag on the rest of the operation if things don’t work out.
Similarly, the two companies having their streaming services walled off could make them more attractive to companies like Paramount, which might be seeking a bundling partner for its own streamer Paramount+. Either way, having these aspects of the companies be separate allows the TV side to focus on TV issues, and the streaming side to focus on continuing to evolve without having to worry about pulling the linear business along with it.
Either way, Comcast and WBD will face a market that could be ripe for deal-making. Many industry analysts see the election of Donald Trump and the power-taking by Republicans as a sign that there will be fewer regulatory roadblocks to big transactions moving forward — unless those transactions are entered into by firms that the oncoming president sees as political enemies.
“The climate for deal making is going to be really strong in 2025 for a lot of reasons,” said Reed Phillips, the co-founder and chief executive of Oaklins, an investment bank for media, marketing and technology told the New York Times. “It’s a combination of a good economy, the uncertainty about the election being resolved, and there are a lot of companies that need to show growth again so that they themselves are attractive to investors.”
Max
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