Two mini-major TV-film production studios -- MGM and Lionsgate -- are obvious targets. Plus, AMC Networks, the midsize cable TV network group has been floated as acquisition material.
AMC Networks had been through this acquisition talk for years -- back before Discovery bought Scripps Networks Interactive for $15 billion in 2018.
Before that deal, the thinking was that both the midsize cable TV network groups, Scripps and AMC, would need to merge sometime to compete with bigger TV networks. This occurred about the same time cord-cutting began to rear its head, leaving cable TV networks with an increasing erosion of legacy pay TV subscribers.
Modern media mergers are about “horizontal” combinations. In short, TV networks and/or studios are combining with other similar companies, hopefully to compliment each other. That’s the thinking behind Discovery and WarnerMedia.
In part, one can see the interest Amazon may have when it comes to buying the mini-major studio MGM for a reported $10 billion.
With Netflix ramping up production -- $17 billion this year -- and Discovery-WarnerMedia recent floating a $20 billion proposed spend for all its TV and movie production spend yearly -- the bottom line is easy to figure out. It’s all about content.
You want to say content is king? You’re thinking too narrow. Content isn’t just one person. It is the kingdom -- all of the people. Everyone can do it. But if you want to get there faster, buy something.
One thing is certain: There is no need to merge with a communications/cable/mobile phone company. That vertical integration stuff is no longer needed. Verizon and T-Mobile never really considered owning big, legacy media content. And Verizon just sold off its Verizon Media, which includes Yahoo and AOL.
For its part, cable-centric/ broadband operator Charter Communications also never really took aim in this area. And now AT&T leaves the scene.
That leaves Comcast Corp, the lone major vertical media operator. And while the company has done a good job after a decade of owning NBCUniversal, now with rising value, there may come a moment when it departs.
Previously analysts believed it could be NBCU merging with WarnerMedia to compete with Netflix and Walt Disney.
Wells Fargo analyst Steven Cahall wrote that now Comcast and ViacomCBS may be “suddenly feeling lonely.” Both had been called big media. Maybe they need to shop for a media brand modifier.