After the rapid pace of media industry consolidation in 2017, companies like Verizon have been pegged as next most likely to go after media M&A. But Verizon CEO Lowell McAdam says not so fast.
McAdam admitted that there’s a lot of movement in the space right now but that his company largely ignores any interest. He also said that it’s still unclear if AT&T’s $85.4 billion merger with Time Warner is going to get approved and that it will take some time for Disney’s $52.4 billion deal for Fox to shake out.
“The message that Disney and Fox are sending is that scale matters. We look at this but you have to take a look at whether being a big independent distributor is a reasonable alternative to owning content. I think until all of this shakes out you really can’t determine whether that’s a path that we’d be interested in. But I can say unequivocally that there is nothing going on right now with us considering a large media play,” McAdam said.
McAdam said recent actions like the NBA and NFL announcements Verizon made in the past few weeks show that Verizon values being a great partner and being able to monetize through advertising.
“Being independent is a very good place to play for us right now and until further notice that’s where are investors should assume we’re doing,” McAdam said.
McAdam’s comments come as deals like Discovery’s $14.6 billion acquisition of Scripps and Sinclair’s $3.9 billion deal for Tribune Media continue to play out, but also as rumors of CBS and Viacom recombining have rekindled.
As rumors once again swirl, Rosenblatt analyst Alan Gould said that CBS would be better off partnering or merging with Verizon.
In a research note, Gould said a combination of CBS and Viacom—both of which are controlled by Shari Redstone’s National Amusements—would offer little by way of synergies.