Media Mergers: Time to make a deal?

Late 2009 may eventually be remembered as a time when media mergers moved to a new level, with the announcement of the planned Comcast-NBC Universal venture. Given the huge significance of that announcement and its potential impact on video entertainment content, TV service provider competition, broadcast economics, Net neutrality and other areas, it may come as a surprise to hear that 2009 actually was a very slow year for media consolidation.

PricewaterhouseCoopers (PwC) Transaction Services just released its "2010 U.S. Entertainment & Media M&A Insights" report, which noted that the number and dollar volume of completed entertainment and media industry deals last year actually were down 29 percent and 49 percent, respectively.  

PwC indicates in the report that improving general economic and credit market conditions point toward a potential deal revival in the media sector starting this year and beyond. Service provider competition could play in that revival, too, as cable TV companies and telcos size up their possible responses to the Comcast-NBC Universal deal.

Still, any similar deals that follow in the footsteps of Comcast-NBC could come about much later and much more gradually than some of us initially thought. Last fall, even before the Comcast-NBC deal officially was announced, the writing appeared to be on the wall for yet another round of classic convergence-driven deals affecting telecom, broadcasting, online video and mobile. However, current percolating of regulatory, Congressional and public scrutiny of the Comcast-NBC could make other companies much more cautious about taking a similar route.

Content ownership and control was already perceived to be one of the biggest issues affecting TV service providers heading into 2010. That remains the case, though as Comcast-NBC scrutiny continues to mount, other service providers, some of whom have joined the public outcry against this particular planned deal, will keep their own potential content activities, including possible M&A, on the back burner.

-Dan

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