Loading ...Could the Comcast-NBC Deal Spur More M&A?
Comcast is buying control of NBC Universal from General Electric. GE plans to sell its remaining stake, giving the nation’s top cable distributor full control over an array of programming content that includes NBC, CNBC, and cable networks like Bravo. Regulatory hurdles could take more than a year, but if approved, it could trigger a rush of mergers.
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Make no mistake, the Comcast-NBCU merger is a content-driven deal. Comcast will take control over programs it distributes through its cable and internet operation, creating an economy of scale that should allow Comcast to command better terms with advertisers.
After the Comcast-NBCU merger, there are few other large-scale mergers that are content deals. The potential sale of Metro-Goldwyn-Mayer could attract interest next year, but most of the quick activity will focus on content creators like Scripps Network, the CW, or Discovery Network.
None of these targets are as diverse at NBCU.
Christopher Vollmer, a partner at Booz & Company who specializes in media and entertainment, said M&A activity “is towards higher growth areas such as video games, advertising/marketing services and related technologies, Internet, and, perhaps, the few remaining cable network groups that are not part of a major conglomerate.”
First, however, Comcast must run the regulatory gauntlet. Media mogul John Malone recently told the Associated Press that the deal will give Comcast too much power. While this deal is nothing of the scale that Time and Warner Brothers faced in 1989 with its merger (and ironically, Time Warner is the fourth largest entertainment conglomerate 20 years later), the Federal Trade Commission will be interested in the impact such a merger will have on journalism and national newsgathering.
Comcast CEO Brian Roberts could become a political issue himself as one of the most powerful people in media, overseeing 24-million subscribers of video, voice, and Internet services, theme parks, broadcast and cable networks, and a film studio.
What do you think of this merger? Will it be good or bad for the consumer in the end?
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