Sep. 8, 2015, 9:57 PM
- The $2.4B combination of Media General (NYSE:MEG) with Meredith Corp. (NYSE:MDP) had the distinction of pushing M&A value in 2015 to an all-time record by early September ($1.503T in announced transactions, surpassing 1999's $1.497T), but when it comes to local broadcasters, industry consolidation may be a no-choice alternative.
- Station owners face a challenging negotiating position with content creators, Miriam Gottfried notes, even as declines in ratings and ad sales pressures everyone. Broadcast station owners have high margins, a fact that some content owners (CBS more than many others) are pressing in tough retransmission negotiations.
- Streaming services might go without them as well, as Sling TV has. Getting bigger (as acquisitive Media General was doing even before the Meredith deal) may help strengthen their hand, but the FCC is getting involved in retrans rule-making and may be biased against local broadcaster power as well.
- Previously: Meredith jumps 9.5%, Media General slips 6.3% in reaction to $2.4B tie-up (Sep. 08 2015)
- Previously: Media General to buy Meredith for $2.4B (Sep. 08 2015)
Jun. 8, 2015, 5:19 PM
- In the latest (but not the last) contract dispute over TV programming, AT&T (NYSE:T) has a contract expiration coming June 30 for CBS and its cable channels, including Showtime -- and CBS seems to be expecting its channels to go dark on the U-verse service.
- CBS is showing frustration with AT&T's slow progress, The Wall Street Journal reports, and is concerned that it's a precursor to a U-verse shutdown by AT&T, which is hoping to close its acquisition of DirecTV (NASDAQ:DTV) also by the end of June.
- If CBS stations go dark, 2.5M subscribers (many more in Showtime's case) would lose the programming, primarily in Dallas, Los Angeles and Chicago.
- AT&T has suggested that it had no plans to shut down U-verse just because of acquiring DirecTV, but if the merger closes before the U-verse contract is renewed, the DirecTV team might take over negotiations -- and that with the advantage of seeing a one-time rival's contract with the broadcaster.
May 27, 2015, 2:03 PM
- "I would like to buy CBS. I'm not going to," says CEO Les Moonves of the now-frequent speculation that he'd like to take over the controlling stake that Sumner Redstone's firm has in the broadcaster.
- “The board of directors will decide the fate of this company,” he said while speaking at Code Conference, echoing what Redstone has said himself.
- Moonves has reportedly talked with financiers about trying to assemble $2B to buy control of the stake. He added that while TV/Internet distributors are consolidating, he doesn't see the need for content companies to do the same.
- "We don't want to be reunited with them, not them with us," he said of Viacom (VIA, VIAB) -- run by Philippe Dauman, whose style Moonves reportedly clashes with.
- When it comes to CBS working with a revamped Apple TV, Moonves pointed to the key: "money." He's met with Apple's Eddy Cue about joining a small bundle of channels for iOS devices.
- Moonves has previously noted "You can't live without us" in skinny bundles, and today pointed again to must-have attributes: Apple's looking at "a more select group at a lower price. Any one of those groups will need CBS. We have the NFL, which is must-have television."
May 22, 2015, 6:44 PM
- CBS zipped through its annual meeting in about a half hour and, as expected, Chairman Sumner Redstone skipped it, as he did Viacom's meeting in March and recent earnings calls.
- Despite the (upbeat) content of CEO Les Moonves' state-of-the-company presentation, shareholder question No. 1 was about M&A.
- Moonves yet again dismissed rumors that CBS might take over Viacom (VIA, VIAB): “We have no intention at this point in time or any time in the future to take over anybody ... We are very satisfied with our assets and our performance. We don’t see anything like that."
- But considering the nature of Redstone's heavy control of both companies, and the confusion around succession, a sale/merger of one or both after his death gets increasingly likely.
- Redstone's current setup means control of his trust would pass to seven people, only two of which (including daughter Shari Redstone) are family members. The relationship with Shari is reportedly strained, and as Sumner Redstone's live-in girlfriend and ex-girlfriend plan his 92nd birthday party next week, Tony Bennett is invited -- but not Shari.
- At the meeting, Moonves praised the network's increased ownership of its shows (important as content licensing becomes a more significant revenue driver) and its moves into digital distribution.
- Previously: Redstone to skip CBS annual meeting next week (May. 14 2015)
Apr. 24, 2015, 7:30 PM
- Comcast has ended its pursuit of Time Warner Cable, but what about that lawsuit from content companies that threatened to slow the whole thing down?
- Companies including CBS, Walt Disney (NYSE:DIS) and Viacom (VIA, VIAB) argued that the FCC's sharing hundreds of thousands of pages of negotiating strategies with third-party merger opponents like Dish Network (NASDAQ:DISH) would be "highly damaging." The fight was likely to add several weeks to any related merger consideration.
- The suit, still at the U.S. Court of Appeals, is still in progress because it also involved the ongoing AT&T (NYSE:T) deal to acquire DirecTV (NASDAQ:DTV). Attorneys close to the case are figuring that the Comcast-TWC documents will now be off the table as a moot point.
- Still, the decision likely still has an impact on the timeline for AT&T/DirecTV. The FCC will file an updated notification with the court.
- Previously: AT&T sells third-biggest debt offering to fund DirecTV purchase (Apr. 23 2015)
- Previously: Comcast, TWC move higher premarket on merger's end (Apr. 24 2015)
- Previously: It's over: Comcast officially ends $45B pursuit of TWC (Apr. 24 2015)
Apr. 9, 2015, 9:08 PM
- Don't let recent merger challenges and failures fool you, Michael Wolff argues: "M&A mania" is coming to a media conglomerate near you amid pressure for a new wave of consolidation.
- "Perhaps never before has consolidation been so much the flavor of the month, nor has it seemed so difficult to get a taste," he writes. "The table is set, but nobody's sitting down to eat."
- If Comcast (NASDAQ:CMCSA) fails in its bid for Time Warner Cable (NYSE:TWC), he notes, it just means other cablers will step up to match Comcast's ambition, and Comcast will still look for a way to stay dominant.
- He points to a number of mergers he thinks are easily imaginable: Viacom (NASDAQ:VIA) and FOX? Disney (NYSE:DIS) and Time Warner (NYSE:TWX)? TWC and Charter (NASDAQ:CHTR)? Discovery (NASDAQ:DISCA) and, well, most anyone (Disney, Fox, CBS)?
- Factors encouraging the wave: Media's all about video now, and the pure-play aspect makes merger logic cleaner; distribution and content are separate and now even antagonistic businesses; the growth of over-the-top means not unbundling but re-bundling; and everyone needs scale for negotiation strength in content and ad deals.
- Other key players: John Malone (LMCA, LBTYA, STRZA); Verizon (NYSE:VZ); Lions Gate (NYSE:LGF); Scripps Networks (NYSE:SNI); Netflix (NASDAQ:NFLX); DirecTV (NASDAQ:DTV) and AT&T (NYSE:T); Dish Network (NASDAQ:DISH).
Mar. 17, 2015, 4:54 PM
- The future of CBS might well include some kind of tie-up as the era of Chairman Sumner Redstone starts to draw to a close -- and last year, CEO Les Moonves talked with Time Warner (NYSE:TWX) chief Jeff Bewkes about making a merger, Bloomberg reports.
- Bewkes wasn't interested, though, and so speculation continues. Redstone's health has been the subject of increasing conversation -- he will be 92 in May, and missed his usual speaking part on Viacom's January earnings call -- as has succession planning for his empire.
- The trustees that will take over Redstone's interests upon his death include Viacom (VIA, VIAB) CEO Philippe Dauman and Redstone's daughter Shari, but not Moonves.
- Moonves has talked down merger chatter before ("very happy being alone"), though that may be about boosting price -- Moonves says CBS will be a $100 stock in four years, while BofA's Jessica Reif Cohen says TWX could offer $80/share.
- Moonves has said he doesn't think a Viacom reunion fits either, and he reportedly gathered partners earlier this year with an eye to taking the network private.
- Previously: March Madness equals billions in ad-ness for CBS, Turner (Mar. 17 2015)
Mar. 13, 2015, 4:28 PM
- As signaled before, the FCC has paused the 180-day "shot clock" on reviewing two megamergers -- Comcast's (NASDAQ:CMCSA) deal for Time Warner Cable (NYSE:TWC), and AT&T's (NYSE:T) deal to buy DirecTV (NASDAQ:DTV) -- as it's tied up with another case over programming contracts.
- The review of the deals was set to expire by the end of March, but now may take somewhat longer, likely several more weeks.
- The cause is the ongoing dispute with programming firms -- Disney (NYSE:DIS), CBS, Twenty-First Century Fox (NASDAQ:FOXA), Viacom (VIA, VIAB) and others -- over whether third parties commenting on the mergers will get access to private documents containing sensitive pricing and strategy information.
- The FCC has argued it has sufficient protections to keep those details from getting out. But the merger reviews now appear to be dependent entirely on that case's timetable.
- "In reaching this conclusion, the commission reserves the right to restart the clock as it believes will best serve the public interest," the FCC said.
Mar. 2, 2015, 8:23 PM
- Les Moonves said on CNBC last month that CBS was "very happy being alone," and the CEO doubled down on that talk at the Morgan Stanley Technology, Media and Telecom conference.
- Moonves says his COO tells him that CBS will be a $100 stock in four years, so buyers or merger partners like Time Warner (NYSE:TWX) or Viacom (VIA, VIAB) would have to pay "a very high price." CBS shares gained 4.5% Monday to close at $61.75.
- He also expressed little concern about smaller cable bundles or any lack of negotiating power by eschewing a merger, saying CBS will be in every bundle. "People can't live without CBS ... We like the hand we're playing."
- The company faces new negotiations with DirecTV (NASDAQ:DTV) and Cablevision (NYSE:CVC) at the end of the year.
- Previously: AMC Networks finally looking for a deal? (Feb. 25 2015)
- Previously: Cumulus higher in late trade as CBS M&A chatter flies (Feb. 24 2015)
Feb. 25, 2015, 8:39 PM
- The addition of Gregg Seibert, the former investment banker, as vice chairman of AMC Networks (NASDAQ:AMCX) has folks talking about whether the network is now a much more likely candidate for an acquisition.
- "Clearly he is there to do deals," FBN Securities' Robert Routh says. "Either it's going to be a sale or a big acquisition or possibly a privatization. The question is, what is it?"
- Speculation has floated about AMC as a takeover target for some time, with CBS or Twenty-First Century Fox (NASDAQ:FOXA) among the names listed as potential buyers.
- AMC has sported high-quality programming that's attractive to partners, including Mad Men, The Walking Dead and Breaking Bad, and has been garnering critical acclaim for its spinoff Better Call Saul, though as hits end, they'll need to be replenished. Rich Tullo at Albert Fried called for AMC to go with an a la carte service.
- AMCX announces earnings in the morning; expectations are for EPS of $1.01 on revenues of $603.1M.
Feb. 24, 2015, 6:39 PM
- Sandell Asset Management is reportedly pressing a familiar line with CBS: Spin off your radio stations and (in this case) merge them with Cumulus Media (NASDAQ:CMLS).
- While CBS chief Les Moonves has highlighted the cash flow and 40% margins provided by the 117 stations the company owns, Sandell suggests that in a reverse Morris Trust merger, CBS could divest an asset with a low tax base at low impact.
- Cumulus' takeaway? Scaling up to combined sales of $2.4B and a market cap of almost $5B.
- One headwind is Cumulus' leverage, at a ratio of 6.5x EBITDA after purchases of Citadel Broadcasting and WestwoodOne, while another is Sumner Redstone's grip on CBS' vote.
- After hours: CMLS +3.1%.
Dec. 31, 2014, 8:42 AM
- Streaming: Sony (NYSE:SNE), HBO (NYSE:TWX), CBS (NYSE:CBS), and Dish Networks (NASDAQ:DISH) are set to unveil streaming products in 2015. The theory of the companies that the skinny bundles will draw in more cord-cutters and cord-nevers than they will cannibalize current pay-TV subscribers will be put to the test. The rush of streaming options could help or hurt Netflix (NASDAQ:NFLX) depending upon which analysis an investor leans on.
- Theater traffic rebound: Exhibitors (CNK, RGC, AMC, CKEC, IMAX) and movie studios (LGF, VIA, VIAB, DIS, FOXA, CMCSA, TWX) maintain that the decline in theater attendance in 2014 (-6%) was due to a slate of films light on blockbusters. A bounce is forecast for 2015 with high-profile films such as Avengers: The Age of Ultron, The Hunger Games: Mockingjay Part 2, Fifty Shades of Grey, Jurassic World, Spectre (James Bond), and Mission Impossible 5 all set to premiere - along with the reboot of the Star Wars franchise in December. Capex spending on theater upgrades could also help boost in-theater spending and average ticket price for exhibitors.
- Mergers: If regulators allow the Comcast-Time Warner Cable (NYSE:TWC) and AT&T-DirecTV (NASDAQ:DTV) mergers to sail through it could clear a path for other media combinations, note analysts. Potential buyers include Alibaba (NYSE:BABA), Wanda Group, Softbank (OTCPK:SFTBY), and a TWX-rebuffed 21st Century Fox (NASDAQ:FOXA). Content producers which could be targets include Starz (NASDAQ:STRZA), Lions Gate (NYSE:LGF), DreamWorks Animation (NASDAQ:DWA), AMC Networks (NASDAQ:AMCX), and Scripps Networks (NYSE:SNI). A split-up Madison Square Garden (NASDAQ:MSG) could also be enticing.
Dec. 12, 2014, 12:13 PM
- Time Warner (NYSE:TX) CEO Jeffrey Bewkes speculated on the potential for a mega-merger in the media industry yesterday during a discussion at a conference sponsored by Dealbook.
- The exec mentioned CBS (NYSE:CBS) and Viacom (VIA, VIAB) as two companies that might like to combine within the sector.
- Time Warner remains very much in the M&A discussion after spurning an $85-per-share offer from 21st Century Fox (NASDAQ:FOXA) earlier this year.
- "I don’t want to talk about it," says Bewkes after already pointing to the elephant in the room.
Oct. 18, 2014, 11:15 AM
- AMC Networks (NASDAQ:AMCX) plans to ramp up the production of original drama series heading into next year.
- A network producer meeting this week included pitches on seven new series, according to Deadline.
- AMC has been the network which may have benefited the most from SVOD and time-shifted viewing trends with Breaking Bad (2008-2013), The Walking Dead (2010-present), and Mad Men (2007-2015) all late-breaking hits - while Halt and Catch Fire (2014-present) is tapped to be next breakthrough.
- What to watch: Media analysts think AMC's formidable track record of producing engaging content puts it in a strong position even if the pay-TV model cracks (new streamers: CBS, HBO). The company is considered by some an enticing takeover target for a larger media company. CBS (NYSE:CBS) and 21st Century Fox (NASDAQ:FOXA) come to mind.
Jul. 17, 2014, 1:20 PM
- If 21st Century Fox (FOXA +0.1%) strikes a deal to buy Time Warner (TWX +3.7%), media analysts thinks a chain reaction will occur.
- CNN will almost assuredly be unloaded, most likely to Disney (DIS +0.6%) or CBS (CBS +2.5%).
- The development could also draw out a tech giant such as Apple or Google to make a bid for content-heavy Lions Gate (LGF +0.1%) or Discovery Communications (DISCA +2.2%).
- Though premiums in the media sector are expected to get quite frothy, having significant content owned in perpetuity might pay off in the future as some licensing costs go away.
- Looking for a wildcard scenario? NYT M&A writer David Gelles thinks a spoiler plan would see Time Warner take the defensive measure of trying to buy out CBS.
- A catch-all for investing in media stocks is the PowerShares Dynamic Media ETF (NYSEARCA:PBS).
Jul. 16, 2014, 10:01 AM
- Rupert Murdoch's interest in Time Warner is giving a bit of a boost to other content-heavy media companies.
- The combination of content-heavy studios with powerful media distribution firms has been a hot topic over the last week.
- CBS (CBS +1.9%) is out-performing with speculation picking up that it will make a nice fit for a tech giant someday.
- Other gainers: Lions Gate (NYSE:LGF) +6.2%, Discovery Communications (NASDAQ:DISCA) +4.5%, Viacom (VIA, VIAB) +5.1%, AMC Networks (NASDAQ:AMCX) +3.5%.
- Related: Content owners smile with tech heavyweights in the house, Time Warner-21st Century Fox timeline.
CBS Corp. operates as a mass media company, which creates and distributes content across a variety of platforms to audiences around the world. The company operates through five segments: Entertainment, Cable Networks, Publishing and Local Broadcasting. The Entertainment segment is composed of... More
Industry: Broadcasting - TV
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