Summary List Placement
Media insiders are speculating about potential industry-shaking
deals in 2021, like a merger of AT&T’s WarnerMedia and
Comcast’s NBCUniversal or a tech takeover of MGM or Lionsgate.
Insider spoke with 10 media bankers, consultants, and other
experts about how talks between media giants could play out.
Legacy-media companies that recently bet on streaming to reach
people who were abandoning traditional media, like Comcast,
AT&T, and Discovery, will likely take a hard look at how those
efforts are faring, said media consultant Sebastian Blum, a partner
at OC&C Strategy Consultants.�
Companies who deem their efforts promising may try to snap up
troubled assets that could propel their streaming ambitions
farther, such as content owners MGM, with its Bond franchise or
Others, particularly those that have been on buying sprees in
recent years, may try to unload assets that aren’t moving the
needle or consider other combinations to get a new edge. That’s
part of the rationale behind
talk of a long-shot merger between AT&T’s WarnerMedia and
“Firms like Comcast and AT&T already dismantled everything
that they could,” Blum told Insider, referring to how the
distributors snapped up media companies in the past. “They will
think about what to do next. How do I get a critical mass of these
people? What are the configurations that make sense? Is it time to
Those conversations could create a boon for smaller content
companies, production houses, animation shops, and other studios,
leading to combos like Reese Witherspoon’s Hello Sunshine and
Gwyneth Paltrow’s Goop.
Smaller companies like Will Smith’s production company Westbrook
might also be an acquisition target as big operators look to scale
“You’re going to see the Disneys of the world, the HBO Maxes,
the Peacocks, looking at all kinds of content fare, especially
family and independently owned,” said EisnerAmper’s Michael Breit,
who runs the tax and advisory firm’s sports and entertainment
Local media could see a burst of activity if the Federal
Communications Commission, while still under Ajit Pai, argues for a
relaxing of local ownership limits. The
Supreme Court is set to weigh in on the topic later this month;
ownership rule changes at the FCC have been blocked by courts.
Disney: could unload assets that aren’t moving the streaming needle
Market capitalization as of January 11: $324.8
Some think Disney try to sell off its non-DTC assets like its
news and sports properties, now that its streaming service has
One of the most speculated moves is a spin of ESPN to existing
Disney shareholders. Much will depend on how the NFL rights
negotiations go after the Super Bowl concludes. Disney’s ABC hasn’t
had a Super Bowl in some time. Disney wants to simulcast the event
between ESPN and ABC but the outcome will depend on what rival bids
look like. And with AT&T’s Sunday Ticket package looking like
it might come loose, might Disney pick it up?
ESPN’s streaming transition hasn’t been the rocketship Disney
Plus has. Its subscription streaming service ESPN Plus has 11.5
million subscribers, compared with Hulu’s 38.8 million and Disney
Plus’ 86.8 million.
But ESPN’s audience of sports fans is still attractive to Disney
investors, and its sports rights and programming are
key to the company’s streaming expansion plans in Latin
America, making Disney less likely to part with the sports
network this year.
One highly placed source notes that the Street has not punished
Disney for all the parts that aren’t working, such as theme parks
and the inevitable decline of its traditional TV business, and so
all chief executive Bob Chapek needs to do is keep pedaling and he
can keep it all together, if he chooses.
AT&T: could spin out Turner, DirecTV, or other assets
Market capitalization as of January 11: $205.4
The high price could put pressure on AT&T to sell more of
its assets, leaving some wondering if WarnerMedia head Jason Kilar
will be able to hang on to Warner’s gaming unit.
A much-rumored combination of WarnerMedia and NBCUniversal might
seem remote, though it’s hard to rule out AT&T selling Turner
or its parts. A source close to the company said AT&T has been
more friendly to bankers who are presenting ideas to spin-out
Turner, which is tightly integrated with the rest of the company
and would be tricky to separate.
If a deal comes together in the latter half of the year, then
there’d likely be a CNN sale, which some hope would interest an
ultra-high networth individual like a Laurene Powell Jobs, Jeff
Bezos, or his ex-wife MacKenzie Scott.
AT&T might also make good this year on a long-speculated
spin off DirecTV.
WSJ reported in December that AT&T was taking bids for the
satellite-TV service from private-equity firms including Apollo
Global, TPG, and special-purpose acquisition companies such as
Churchill Capital Corp. IV.
AT&T probably won’t come close to recouping the $49 billion,
not including debt, that it paid DirecTV for in 2015, though. The
WSJ said the bids valued DirecTV at around $15 billion with
Comcast: could spin off NBCUniversal
Market capitalization as of January 11:
Comcast’s NBCUniversal is in a period of deep transformation,
slashing headcount at traditional channels to make way for
streaming investment at the Peacock network.
Wall Street prognosticator Rich Greenfield
argues that NBCU doesn’t need to be part of a big distribution
company and could merge with WarnerMedia. “We believe investors
would be ecstatic over a combination,” he wrote in November.
It might be worth NBCU chief Jeff Shell trying to sell this idea
to Comcast’s chief executive Brian Roberts if the big pivot to
streaming plan proves underwhelming.
ViacomCBS: could make a play for MGM and Lionsgate
Market capitalization as of January 11: $24.9
When Viacom finally came together with CBS, word was controlling
shareholder Shari Redstone would acquire something big. Redstone
ended up taking a piece of Miramax, leading some to think MGM and
Lionsgate are likely targets.
Maybe now, at the right price, MGM has more impetus to join
forces with the self-described programming “arms dealers” of
streaming. AMC Networks, owner of properties like “The Walking
Dead” franchise, is another potential target.
ViacomCBS stock had a rough ride in 2020, when it was trading in
the twenties, down from its current price of around $40. The only
way is up in 2021 as the company looks to rebrand CBS All Access
into Paramount Plus and continue selling shows to rival
The company sold CNET and publishing company
Simon & Schuster in 2020 and tried to offload its
headquarters, known as Black Rock. Black Rock will likely be on the
block again this year, and ViacomCBS could decided it has other
non-core assets to shed.
It could also eye MGM to bulk up on IP.
ViacomCBS is now so small versus the rest of the media universe
that it could become a target itself, with potential buyers from
Discovery to Amazon, which looked at CBS’s books before the
Few think Redstone is in any mood to relinquish her mogul status
just yet, but to keep it, the company needs CBS to hang on to NFL
rights â€” which means ViacomCBS has to go big or go home.
Discovery: positioning itself as a buyer
Market capitalization as of January 11: $15.5
Last year, reports suggested Discovery might combine with a
player like ViacomCBS trying to amass scale to challenge
frontrunners like Netflix and Disney in streaming. But, in the past
year, Discovery has positioned itself more as an acquirer.
A French news outlet
reported in September that Discovery had held talks with
Italian media company Mediaset SpA for a potential partnership, and
one media consultant says it shows the company is more interested
in being a buyer than seller.
CEO David Zaslav also revealed in December his plan to make
Discovery an international name in streaming with Discovery Plus,
which will house the company’s catalog of comfort programming and
brands like “90-Day Fiance,” the Planet Earth franchise, and Chip
and Joanna Gaines’ Magnolia Network. With some help from Verizon,
Discovery Plus hit the top of the free app charts.
There’s no word yet on subscriber numbers, but the Tokyo-Olympic
Games should whet consumer appetites across Europe.
Sony Corp.: could buy MGM or exit the studio business
Market capitalization as of January 11: $130
Sony Corporation of America has long been the crown jewel of
Japan’s tech giant Sony, and as such is viewed as an acquisition
target by other media and tech giants.
The company houses a movie studio, gaming unit, TV assets, and a
giant music business, which may suddenly look more valuable as
rival Universal Music comes to the public market in 2022.
In early 2020, Sony acquired Insomniac Games for
$229 million, and could be on the hunt again if WarnerMedia
decides to sell its games unit. Under the leadership of Tony
Vinciquerra, Sony Pictures Entertainment may also decide it wants
to expand its movie franchise and incorporate
MGM, which is considering a sale.
If history is a guide, Sony won’t sell its media assets and is
unlikely to join other congloms in doing day and date releases via
SPACs: on the hunt for media companies
Special Purpose Acquisition Companies are proliferating, and
everyone wants to run one or get in on the gold rush by accessing
Jonah Peretti and Group Nine’s Ben Lerer are each forming their
own to take advantage of less stringent rules than traditional
IPOs. Their aggressive moves leave media watchers wondering if Vice
Media’s Nancy Dubuc will follow suit and fulfill cofounder Shane
Smith’s longtime hope of taking the company public.
SPACs rely on investors trusting strong management teams to
identify assets that might perform better with more access to
Former Disney chief Kevin Mayer, Tom Staggs, and Shaquille
O’Neal raised $300 million for their venture, while former Goldman
Sachs alum Gerry Cardinale is hoping to acquire sports data firms
through a SPAC created by his company’s
RedBird Capital to capitalize on what will be a hot sector in
Last week, former Dick Clark Productions’ chief executive
Michael Mahan launched
Bright Lights Acquisition.
Whether there are enough enthusiasts to go around remains to be
seen. Skeptics think we’re headed for Tulip mania circa 1637.
Firms focused on live-entertainment could gobble up venues and
Live-entertainment has been stymied by lockdowns for the past
year, but the industry is
hoping for a “Roaring 20s”-style boom when things reopen.
Breit at EisnerAmper said he expects a range of companies such
as Live Nation, James Dolan’s MSG Entertainment, and SPACs, to snap
up venues, music clubs, and other live-event spaces during the
first half of 2021, in anticipation of an explosion of
live-entertainment in the second half of year.
For those looking to bet that consumer habits have changed and
that going out is still a risky business, the growth of online
celebrity platforms such as Cameo, Patreon, and StageIt might prove
a worthy investment. Both Cameo and
StageIt are out shopping for fresh capital.
Source: FS – All – Entertainment – News
Media could be rocked by major deals in 2021 — including a
merger of WarnerMedia and NBCUniversal and takeover of MGM