M&A

After record deal-making in 2021, the number and dollar value of M&A in media and telecommunications fell during the past 12 months through November, according to the latest report by PwC.

Warner Bros. Discovery has been going all-in on cutting costs to alleviate its roughly $53 billion debt. But with uncertain financial prospects, the company might find itself in another merger —with Comcast. Comcast CEO Brian Roberts could be interested in combining WBD with NBCUniversal, giving the cable giant access to a well-known streaming service in the form of HBO Max.

Axios, the digital media startup covering politics, technology and media, has agreed to be purchased by Cox Enterprises, the communications, automotive and media company. The value of the deal for Axios Media was $525 million, according to a source familiar with the transaction and other reports. Cox Enterprises bought a stake in Axios last year.

Tremor International said it agreed to acquire Amobee for $239 million, continuing the dealmaking and consolidation in the ad tech business. Tremor International provides an end-to-end advertising technology. Amobee offers an advertising platform that optimizes outcomes for advertisers and media companies across linear TV, connected TV and digital media.

Nexstar Media Group, the nation’s biggest owner of television stations, is close to a deal to acquire majority control of The CW network from co-owners Warner Bros. Discovery and Paramount Global, according to people familiar with the matter. Under the terms being discussed, Nexstar would acquire 75% of The CW, a broadcast network aimed primarily at teens and young adults, with Paramount and Warner Bros. Discovery each retaining 12.5% stakes, the people said.

Two Democratic lawmakers introduced a new bill last week that would institute a host of new regulations to scrutinize mergers, including a prohibition of those valued at more than $5 billion. The Prohibiting Anticompetitive Mergers Act, sponsored by Sen. Elizabeth Warren (D-Mass.) and Rep. Mondaire Jones (D-N.Y.), would also prevent mergers and acquisitions that would increase market share among sellers and buyers beyond certain thresholds and would give regulators additional tools to unwind mergers.

The Biden administration is looking beyond antitrust theories for input on the “first-hand impacts” of media and tech mergers to help guide its planned rethink of merger enforcement. The Justice Department and Federal Trade Commission, which together divvy up antitrust reviews, will co-host “listening forums,” seeking input beyond antitrust experts to consumers, workers, entrepreneurs and others

A consortium of private-equity firms including Elliott Management Corp. is in advanced talks to buy the TV ratings company for about $15 billion including debt, according to people familiar with the matter. Financing talks with a number of banks are progressing and a takeover deal could be completed within weeks, the people said. There is no guarantee there will be a deal, as the talks could still fall apart.

Discovery investors voted in approval of the company’s $43 billion acquisition of WarnerMedia from AT&T to create Warner Bros. Discovery during a special meeting of stockholders on Friday, marking one of the final formal steps before the transaction can close. The deal, a spinoff of WarnerMedia from AT&T, is expected to be completed early in the second quarter, with insiders estimating between April 11 and 28. The merger has already received approval from the U.S. Department of Justice and the boards of directors of both AT&T and Discovery.

Investors piled into Discovery Inc.’s $30 billion U.S. investment-grade corporate bond deal on Wednesday to finance its mashup with AT&T’s WarnerMedia, a bullish sign for markets rattled by Russia’s invasion of Ukraine.

Apollo Global Management, the private equity firm that acquired Yahoo from Verizon for $5 billion last year, is having preliminary discussions with sports-betting companies to merge their assets with Yahoo Sports, according to people familiar with the matter. One of the companies Yahoo has spoken with is Australia-based PointsBet Holdings, which has a market valuation of about $760 million.

The pending merger between AT&T’s WarnerMedia and Discovery Inc. has won the approval of U.S. antitrust regulators, the companies announced on Wednesday in a Securities and Exchange Commission filing. Now all that stands in the way of a 2Q merger is a Discovery shareholder vote, which should not be a problem.

Tegna is in advanced discussions with one of its largest shareholders, Standard General, about a potential buyout at about $24 a share.

The company is picking a simpler method to complete its deal with Discovery that will make the transaction easier for individual investors to digest, but will still leave the telecom company with about 7.2 billion shares outstanding.

The new entity, known as TelevisaUnivision Inc., builds on a previous production alliance created by the companies as they looked to fend off a rising number of rivals aiming at Hispanic viewers in the age of streaming. As of the merger close, the company claims reach to more than 60% of TV audiences in both the U.S. and Mexico. Across television, digital, streaming and audio, the company says its audience is more than 100 million Spanish speakers daily.

AT&T may be leaning toward a straightforward spinoff of the 71% stake in the new Warner Bros. Discovery in the coming months rather than a complex “split-off,” or exchange offer. A transaction in one of those forms will take place when AT&T merges its WarnerMedia business with Discovery.

With no ownership cap relief in sight from the FCC, broadcasters look to pick up ones and twos along with pursuing other avenues to grow their businesses. Meanwhile, the industry waits to see if Tegna will be sold. Note: This story is available to TVNewsCheck Premium members only. If you would like to upgrade your free TVNewsCheck membership to Premium now, you can visit your Member Home Page, available when you log in at the very top right corner of the site or in the Stay Connected Box that appears in the right column of virtually every page on the site. If you don’t see Member Home, you will need to click Log In or Subscribe.

TVNewsCheck‘s Michael Depp and Paige Albiniak look at the M&A prospects possible in 2022 with the FCC’s 39% ownership cap still in place and where things stand on a potential Tegna sale.

DirecTV and Dish Network are in fresh talks to merge after years of on-again, off-again wrangling and multiple clampdowns from federal antitrust officials. Now, however, insiders are optimistic a Dish-DirecTV deal could pass regulatory muster as concerns about the market power of the struggling companies have waned, sources say. Some executives likewise argue that a merger could give a surprise boost to the U.S.’s troubled rollout of 5G wireless services.

Lionsgate says it’s exploring options for Starz is news that is sure to heat up the M&A rumor mill. The company made the announcement in an SEC filing as it reported quarterly earnings Thursday.

Last year, Facebook Inc. did something U.S. technology giants have done countless times before: It bought a smaller company and closed the deal without notifying competition regulators. But this transaction — the $400 million acquisition of image library Giphy Inc. — was particularly bold. At the time, Facebook was under investigation by antitrust enforcers for what the government says was an illegal practice of buying companies in order to eliminate them as potential threats to its monopoly power. Maneuvers like Giphy’s make policing deals all the more challenging at a time when authorities are being called on to take more aggressive steps to curb the growth of dominant companies, especially in the technology industry.

Shari Redstone is hitting pause on any potential partnership talks between her media company ViacomCBS and NBC owner Comcast in hopes of lining up more suitors. The chairman of ViacomCBS has decided to hold off until next year before re-engaging in talks with Comcast’s Brian Roberts, according to two sources close to the situation.

Nexstar tops the TVNewsCheck-BIA Advisory Services’ annual list of the Top 30 groups ranked by total revenue for the third year in a row. But with the sale of Meredith’s and Quincy’s stations to an acquisitive Gray, the top 10 slots are rearranged following an active 12 months of M&A.

Discovery Inc. CEO David Zaslav, fresh from his announced acquisition of AT&T Inc.’s film and TV businesses, said media consolidation will only accelerate and he intends to be a catalyst. “The talk of the week is going to be that the industry is going to start consolidating a little bit more,” the 61-year-old CEO said on his arrival Tuesday at the annual Allen & Co. conference in Sun Valley, Idaho. “We’re not done yet.”

Even if you don’t know his name, you’re familiar with the megadeals — from WarnerMedia’s merger with Discovery to Amazon’s purchase of MGM — that the LionTree investment banker has helped engineer: “He’s a face-to-face guy. He gets that this business is about connection.”

U.S. cable operator WOW! has signed two separate deals to sell its Cleveland and Columbus, Ohio, service areas and its Chicago, Evansville, Indiana, and Anne Arundel, Maryland, service areas. Atlantic Broadband, a fellow U.S. cable operator and subsidiary of Cogeco Communications, has agreed to acquire the Cleveland and Columbus markets for $1.125 billion. Astound Broadband, a telecommunications holding company, has agreed to acquire WOW!’s Chicago, Evansville and Anne Arundel service areas for $661 million.

The Federal Trade Commission will be the agency to review Amazon’s proposed acquisition of Hollywood studio MGM, according to people familiar with the matter, just as the commission gets a new chairwoman, Lina Khan, who has been critical of the online giant’s expansion.

Content is king in the direct-to-consumer streaming wars with The Walt Disney Co. in the lead and Steve Cahall, analyst at Wells Fargo, sees more deals like the proposed WarnerMedia-Discovery merger on the horizon as media companies seek enough ammunition to compete.

Amazon said Wednesday that it has struck a deal to acquire movie studio MGM for $8.5 billion, bolstering its efforts to become a top player in Hollywood. The deal will give the e-commerce and cloud computing giant a famed studio and catalogue of film and TV titles to beef up its Amazon Prime streaming service, from the James Bond and Rocky franchises to television series like The Handmaid’s Tale and Fargo.

An abrupt landing to a turbulent trip comes with a familiar message: Buying into the content business is hard

ViacomCBS is the latest media company to be spotlighted as a possible takeover target amid the heightened M&A speculation following the WarnerMedia-Discovery tie-up. ViacomCBS shares, which have lost 35% over the past three months, rose 3% in midday trading on Thursday after Bank of America Merrill Lynch analyst Jessica Reif Ehrlich upgraded ViacomCBS to buy from underperform, citing the potential for an acquisition.

A deal would add Metro-Goldwyn-Mayer’s 4,000 films to Amazon’s streaming library, including the James Bond, Rocky and Legally Blonde franchises.

Discovery’s merger pursuit suggests companies as big as ViacomCBS still aren’t big enough to compete when tech and media giants are on the prowl