The Best and Worst Media Mergers of the 21st Century
Apr 15, 2024
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Lucas Shaw from Bloomberg joins Matt to discuss the best and worst media mergers of the 21st century. They analyze the impact of tech giants acquiring smaller platforms, Disney's strategic acquisitions, and the future of Paramount Global Media Company. They also delve into the potential deal between Paramount Global and David Ellison’s Skydance Media.
38:27
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Quick takeaways
YouTube's purchase by Google for $1.65 billion exemplifies successful media deals through strategic growth and transformative integration.
Disney's acquisition of Marvel for $4 billion diversified its content, leading to box office success and dominance in film and streaming markets.
AT&T's acquisition of DirecTV for $49 billion showcases the pitfalls of mistimed media deals, later profited from by TPG.
Deep dives
Google's Acquisition of YouTube - The Best Media Deal of the 21st Century
Google's purchase of YouTube for $1.65 billion in 2006 is hailed as one of the best media deals. The small company with legal issues turned into a major profit-generating entity. YouTube's dominance in ad sales, subscriptions, music, videos, and podcasts solidify its position as a top entertainment platform. Integration with Google provided stability, legal protection, and strategic guidance, ensuring long-term success.
Disney's Strategic Move: Acquiring Marvel for $4 Billion
Disney's acquisition of Marvel in 2009 for $4 billion transformed the film landscape, diversifying Disney's predominantly princess-based content to appeal to a wider audience. Marvel's box office success, launch of Disney Plus, and talent infusion propelled Disney into a dominant film studio. This deal, alongside Pixar's acquisition, revitalized Disney's animation and film divisions, shaping its future content and theme park offerings.
AT&T's Folly: Acquiring DirecTV for $49 Billion
AT&T's purchase of DirecTV for $49 billion in 2015 marked one of the worst media deals due to its timing and subsequent spin-off at a loss. Despite DirecTV's lingering presence in the TV industry, the initial acquisition during the TV peak phase proved a costly misstep. TPG's 2015 acquisition following the spin-off showcases a rare case of significantly profiting from a struggling asset.
MGM's Uncertain Future post Amazon's Acquisition
Amazon's purchase of MGM for $8.5 billion in 2022 reflects cautious optimism amidst uncertainty about the deal's transformative impact. Integrated MGM content into Amazon Prime Video offers promising viewership and content library gains. However, challenges persist, notably Bond franchise uncertainty and inadequate integration of assets. The acquisition's long-term success remains contingent on strategic repositioning and effective content utilization.
The Enigma of Taylor Swift and Travis Kelsey's New Heights Podcast
The success of Taylor Swift and Travis Kelsey's podcast 'New Heights' hinges on their evolving relationship dynamics. Speculation about a potential eight-figure deal underscores the show's newfound popularity and industry interest. While the podcast's potential growth is linked to Taylor and Travis's personal narrative, the uncertainty surrounding their future casts doubt on the podcast's longevity. Stakeholders face a gamble-related decision on sustaining the show's relevance and audience appeal.
Paramount's Merger Dilemma: Casting Shadows on Media M&A Trends
Evaluation of Paramount's impending merger highlights the high-stakes landscape of contemporary media mergers. Balancing private equity entanglements, major tech acquisitions, and studio reshuffling underscores the complexities and risks in modern media business strategies. Paramount's strategic decisions reflect broader industry challenges and opportunities, shaping the trajectory of future media consolidation and market dynamics.
Matt is joined by Bloomberg’s Lucas Shaw to look back at the 21st century's biggest media and entertainment mergers and acquisitions, discuss how many of them actually worked, and anoint their best and worst deals of the century. They then look ahead to the potential deal between Paramount Global and David Ellison’s Skydance Media. Matt finishes the show with a prediction about the future of Jason and Travis Kelce’s podcast, ‘New Heights.’
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