The media business has been anticipating mergers on the programming side since Comcast agreed to buy Time Warner Cable. In a new report, analyst Todd Juenger lays out a bunch of potential combinations and looks at their pros and cons.
The major advantages would be increased leverage to grow affiliate fees as distributors consolidate, added international exposure and chances for cost savings by combining assets such as studios with networks.
For example, Juenger says that 21st Century Fox and Discovery would be a “killer combination,” with a dominant international cable network group (plus cost savings), more leverage for affiliate fees domestically and Discovery’s female audiences would balance Fox’s more male oriented networks. One issue, according to Juenger is whether John Malone and John Hendricks would sell to Rupert Murdoch.
Another strong combination would be Disney with Discovery, for many of the same reasons, plus it would put Disney back in the sports business in Europe.
Other potential combinations listed by Juenger include: 21st Century Fox with Time Warner (could CNN and Fox News co-exist, or could CNN be spun off to CBS); Time Warner and CBS, connecting Warner Bros. to a broadcast network and coordinating HBO and Showtime; CBS and AMC Networks, which would give CBS more cable networks domestically and internationally; CBS and Viacom (though who would run it is an issue), Fox and Scripps Networks Interactive, which would boost fees for Scripps Networks; Disney and Scripps Networks, and Sony and AMC, assuming Sony doesn’t sell its entertainment assets, and Sony with Starz.
