Anyone who wants a shot in the top three streamers — the magic number for subscribers, according to former WarnerMedia CEO Jason Kilar — must choose an alliance. However, only so many merger opportunities remain. Disney’s size is due in large part to its purchasing most of Fox Corp for $71 billion in 2019. They outbid Comcast, which acquired NBCUniversal for about $14 billion in 2013. (Losing out on Fox assets drove Disney’s price point up by nearly $20 billion, which some analysts argue was part of the point.) Comcast moved on to buy Sky for $39 billion, which bolstered its overseas presence. (In an early bid to become the world’s largest media conglomerate Comcast also attempted a $41 billion hostile takeover of Disney in 2004, back when Zaslav was NBCU’s cable/new media chief.) AP WarnerMedia and Discovery is not Zaslav’s first successful power play. Discovery bought Scripps, owner of HGTV and Food Network (among others) in 2018 for nearly $15 billion — the same year AT&T bought Time Warner for $79 billion. After four years, one successful acquisition (Discovery) and one epic fail (AT&T), streaming’s two-horse race is for now a three-horse sprint. As for the companies that could be in play for acquisition and/or near-instant growth, consider the following:
AT&T just spun off WarnerMedia; would Comcast do the same with NBCUniversal? If the future is streaming, the struggling Peacock (9 million paid subs at the end of 2021) may be one SVOD service that can’t make the cut. One possibility, however tricky, would be Paramount and NBCUniversal combining via merger — or, the much-larger Comcast simply buying the former ViacomCBS. Among the kinks to work out is the co-existence of broadcast networks CBS and NBC, an instant FCC no-no. Folding Peacock into the broader (and frankly, better-branded) Paramount+ makes the most sense. It would bring valuable library programming like “The Office,” more originals, and new sports in the form of WWE Network’s wrestling and the Olympics. This hypothetical M&A blockbuster also could bring together Paramount Pictures and Universal Pictures, combine NBCU linear-cable channels with the Viacom suite, and even assemble some unique theme-park opportunities. Nicole Wilder/AMC/Sony Pictures Television Perhaps we’re thinking too big; what about AMC? Last month, we made a pretty good case for someone to acquire AMC Networks, a relatively inexpensive company with a unique suite of streaming products and no permanent leader to push aside. All that’s needed is some cash (market cap: $1.6 billion) and a really great pitch for James Dolan. Or Lionsgate? It would bring along a film studio, pay-cable channel Starz, and some other assets. Hasbro nearly acquired Lionsgate in 2018, but the toymaker instead bought Entertainment One (eOne) the following year. Lions Gate Entertainment Corp., as it is formally known, has a $3.4 billion market cap – about twice the AMC Networks valuation, but a modest gamble these days. Sony isn’t for sale. Sony Pictures, home to series like “Better Call Saul” and Outlander” and movies like “Morbius” and “Uncharted,” generated $6.1 billion in revenue in 2020, down about $2 billion from 2019 (although profits grew). According to Sony forecasts the fiscal 2021 outlook is good, with projected revenue of $9.1 billion and very strong operating income. It’s an attractive target but as a piece of Sony Corp., Sony Pictures would require a spinoff. Not impossible — but also not happening, Sony Group CEO Yoshida Kenichiro told the Financial Times last year. “There is drastic realignment in the media industry, but I think our strategy of creating content as an independent studio while working with various partners will work,” he said.
Sony Pictures feeds a lot of its film and TV to Netflix, which is lucrative for now. With a $123 billion market cap nothing really stops Sony Corp. from investing in its own SVOD service or buying a mid-level one – nothing but Sony, that is. With the selling of Crackle to Chicken Soup for the Soul Entertainment in 2019, Sony Corp elected to act as an arms dealer in the streaming wars and not a direct participant. Fox Fox wants you to know it’s still here. Even after being decimated by Disney, the home to Fox News still boasts a $21 billion market cap. In addition to the number-one cable news channel, Fox still has a strong sports portfolio, free ad-supported platform Tubi, and yes, “The Masked Singer.” If you thought the Dolans were difficult, however, have you met the Murdochs? Like Lionsgate and Sony, Fox does not have an SVOD platform of its own, so Rupert, James, and Lachlan may be more willing to listen to a merger that makes them a player in the pay-streaming space. Or, they could add a paid tier to Tubi — but probably won’t. Anyone wanna buy Roku? No longer a mere device manufacturer and SVOD gatekeeper, Roku has entered the content game with its acquisition of Quibi shows and the launch of originals “Swimming With Sharks,” which premieres April 15. Those are some of the new-media moneybags; old media isn’t dead yet. AT&T sure seems done with the whole entertainment thing — or at least, it sure should be. You know who no one said has to be done? Warner Bros. Discovery. With or without Paramount, Comcast is still large enough to call in reinforcements for NBCUniversal. Even Charter Communications is worth almost $100 billion; old money is nothing to sleep on. Either way, now is not the time for rest. Get out your checkbooks out, old-timers. Tech giants: We accept cryptocurrency. Sign Up: Stay on top of the latest breaking film and TV news! Sign up for our Email Newsletters here.
