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December 16, 2021
Media mergers and acquisitions hit a record high since 2000, set to exceed $240 billion. That’s a 640% increase in just one year. Learn what’s going on to boost your commercial awareness.

2021’s Three Biggest Deals

AT&T Merges WarnerMedia With Discovery

In May this year, American multinational telecom giant AT&T announced a $43 billion deal to merge its own WarnerMedia with Discovery. Financial Times analysts believes a successful acquisition may ‘genuinely’ enable Warner-Discovery, with an enterprise value of more than $130 billion, to compete with Netflix. Discovery’s Chief Executive David Zaslav is yet to confirm whether Discovery will roll all streaming services under the Discovery brand name, or whether specific platforms will be deployed in different markets. This is the approach taken by Disney, which uses Star in India for example, as well as platforms Hulu and ESPN.

Amazon Buys MGM

In May, Amazon agreed to buy Hollywood studio MGM for $8.45 billion including debt. Amazon executives noted the valuable intellectual property held by MGM, the powerhouse behind the James Bond and Rocky franchises. This marks an anomaly in Amazon’s library, after the company has spent billions of dollars on generating its own content across 2020 and 2021, saving on licensing fees.

Verizon Sells Media Businesses

In September, American telecommunications conglomerate Verizon sold its media businesses, notably Yahoo and AOL, to private equity firm Apollo Global Management in a deal worth $5 billion. Industry analysts believe Verizon decided it could not compete with media rivals and instead chose to focus on internet-provider businesses.

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The Future of Media M&A

Analysts believe 2021’s wave of consolidation will continue within the media industry.

The current predictions have been made:

  • NBC Universal will merge with Lionsgate
  • VIacomCBS may attempt to merge with the merged WarnerMedia-Discovery
  • ViacomCBS may decide to merge with NBCUniversal

None of these companies as they exist today have the library, power or money to overtake industry leader Netflix or compete with the speedy growth of Disney+. Netflix leaders and Chief Executive Reed Hastings recently emphasised their businesses as a ‘one-product company’, seemingly unperturbed about the M&A fervour within the industry.

Talking points:

  • Which media companies do you think will be able to compete with Netflix?
  • Do you think mergers and acquisitions are the best way for these media companies to be competitive?
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