Editor’s Note: This article is part of our 2018 Preview feature, which looks at the big topics facing the industry next year. Click here for the 2018 preview in wireless, click here for the 2018 preview in cable and video, and click here for the 2018 preview in the wireline industry.
Up until a few weeks ago, I would have told you that AT&T buying Time Warner for $85 billion—and the incoming court battle with the U.S. Justice Department for approval—was hands down the biggest media M&A story heading into 2018. Then Disney said it would buy 21st Century Fox.
To be sure, AT&T is still a major deal, and another vertical merger like Comcast-NBCUniversal (which, by the way, is finished with its behavioral conditions in 2018) will do a lot to reshape the media industry, both on the content and distribution sides of the equation. But there’s something unique about Disney and Fox, a deal that’s equal parts exciting and intimidating.
It’s exciting for very superficial reasons, like having the X-Men and the Fantastic Four officially join the Marvel Cinematic Universe. But it could be intimidating, particularly for Disney’s competitors, due to the sheer programming scale Disney would gain post-transaction. American Cable Association President and CEO Matthew Polka said “Federal agencies must fully investigate the proposed combination to ensure that it neither violates antitrust laws nor is inconsistent with the public interest.”
Neil Begley, Moody’s lead Disney analyst, focused more on the international reach Disney will gain through Fox assets like Sky in Europe and Star in India.
“The new combined entity will have the global pieces and important IP to compete more aggressively in the face of disruption and with the changing media and entertainment industry, where consumers are more and more empowered with choice of how and when they consume content,” Begley said.
Of course, besides Disney-Fox and AT&T-Time Warner, two other substantial media mergers are in the air heading into 2018: Sinclair’s $3.9 billion deal for Tribune Media, and Discovery’s $14.6 billion deal for Scripps Networks.
Both Discovery and Sinclair have continued to signal that their respective deals will close in early 2018, and recent reports have suggested that the DOJ is close to signing off on Sinclair-Tribune, provided the companies part ways with about 12 or 13 television stations.
Just these four deals alone will make 2018 a fascinating year for tracking media industry consolidation and, who knows, maybe more mergers are on the way. — Ben | @fierce_video