Merger mania in media? Cable corporations might be simply the beginning

The massive cable and medium mergers underneath review could be the beginning of a broader wave of consolidation to hit the show biz.

Rumors ar rife that point Warner is negotiating with Brooklyn-based Vice Media, the magazine-turned-media company currently renowned for manufacturing restive documentaries that air on HBO. Viacom may rejoin CBS, that it split from nearly a decade agone. Univision could also be seeking a emptor and has been in talks with Time Warner and CBS, in keeping with the Wall Street Journal.

Some lawmakers and analysts say it's inevitable that tv programmers can bulk up to square up against demands from progressively powerful cable and medium distributors like Comcast UN agency need to lower their prices for programming.

A frequent defense from cable firms for why monthly bills for purchasers ar therefore high is that the corporations ought to pay high fees to the likes of ESPN and Viacom so as to hold shows like Mon Night soccer and "The Daily Show"; cable firms argue that they have size and leverage to bring those prices down. however programmers like Time Warner and CBS may well be wanting to bulk up presently, as well, to extend their power at the negotiating table. These media firms also are fit for deals as they scramble to stay up with competition on-line.

In a Senate Judiciary Committee hearing Tues on AT&T's bid for DirecTV, Sen. Amy Klobuchar (D-Minn.) aforementioned of these deals ought to be thought of with these larger trends in mind.

"When discussing the merger, we won't do therefore in a very vacuum," aforementioned Klobuchar, UN agency chairs the antimonopoly committee. She noted that Comcast's bid for Time Warner Cable would conjointly dramatically alter the landscape for video distribution, as can AT&T's proposal to merge with DirecTV.


With fewer distributors of video content, that would prompt content firms -- together with broadcast and cable networks -- to bulk up so as to counter the strain by cable and satellite corporations to demand lower programming prices.

"The consolidation poses a elementary question as broadband, video and wireless (converge): what medium scheme can best serve customers each within the gift and within the long term?" Klobuchar aforementioned. "What are going to be the tipping purpose once it involves consolidation?"

AT&T chief operating officer Randall businessman aforementioned within the hearing that his company's $48.5 billion acquisition of satellite supplier DirecTV would provides it bigger power in negotiations with tv programmers.

With interest rates still favorable to finance huge mergers, the time is ripe for deals in associate business that simply some years agone was quickly acquiring the opposition direction, unbundling media properties to cut back prices and contour businesses. Time Warner, as an example, drop AOL and Time Warner Cable, and additional recently has shed Time opposition.

M&A would be a strategically-rational response to redoubled consolidation within the video distribution house," aforementioned Jeffrey timber, a medium and media analyst. "The stakes have gotten higher wherever scale and leverage ar involved, apparently giving rise to associate race of types within the sector."

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