The number of media and telecom deals rose about 28% this year, with 1,014 transactions valued at $469 billion, according to PricewaterhouseCoopers. The figures come as Elon Musk’s pending $44 billion takeover of social media giant Twitter and Microsoft’s upcoming purchase of video game maker Activision Blizzard for $68.7 billion dominated the landscape.

Media deals were more on the internet and software side, according to PwC, although Amazon agreed to purchase movie studio MGM in March for $8.5 billion. In its Mid-Year Deals Outlook report, PwC Deals Partner Bart Spiegel and Technology, Media and Telecommunications Deals Leader Alan Stephen Jones wrote that M&A “activity has recently slowed among some of the major media companies, after a peak driven by content and technology acquisitions to fuel expansion of streaming services.”

But PwC was optimistic that deal growth will continue in the media and telecom sectors, adding that the volume of activity hasn’t slowed despite inflation and rising interest rates. The research giant added that while the pace of deals may slow, a significant amount of cash remains in the system to get deals done. And as always, “businesses are under pressure to transform; the fastest way to do that is through M&A,” PwC said.

According to PwC, private equity players accounted for a big chunk of transactions — increasing to 42% of deals in the past 12 months from 24% in 2018. All in all, private equity deals represented $194 billion of announced deal value, of which 75% were concentrated in the internet and software sectors, PwC said in the report.

Other key drivers include the demand for sports content, as the combination of streaming, ad sales opportunities, sports gambling and other tailwinds have boosted team and league values. PwC also pointed to huge streaming music content deals for legendary musicians like Bob Dylan, Neil Young and Bruce Springsteen, as well as the shift to digital advertising and an emphasis on audience targeting and engagement tracking, as catalysts for deals. ■

Altice USA’s recent acquisition of a regional fiber-optic broadband service provider helped offset organic customer losses in the second quarter, as revenue rose 1.7% to $2.52 billion and cash flow growth was flat at $1.1 billion in the second quarter. 

Altice said unique customer relationships were down by 12,000 in the period, but showed a gain of 23,000 unique customers when 35,000 subscribers from its most recent acquisition -- Morris Broadband -- is included. Altice USA purchased Morris broadband in April in a deal that valued the North Carolina company at $310 million. 

Organic broadband subscriber growth was flat in the period, but increased to a gain of 30,000 customers when Morris Broadband data was included. That compares to a gain of 70,000 broadband subscribers in the prior year. 

The same held  true for video customer losses -- down 48,000 organically in Q2, or 36,000 when Morris Broadband’s 12,000 video customers are considered. Altice USA lost 35,000 video subscribers in Q2 2020.

Also Read: Analysts Brace for Broadband Slowdown 

Residential revenue growth was spurred by a 7.8% rise in broadband sales and a 36.4% spike in News & Advertising revenue, supported by a strong recovery in local, regional and national advertising plus additional political advertising revenue from the New York mayoral and New Jersey  gubernatorial races.

At its Optimum Mobile service -- which was rebranded earlier this month  -- revenue rose 4% to $20.7 million as the company added 5,000 new customers. Optimum mobile ended the period with 180,000 customers, reaching about 3.8% of Altice USA’s residential customer base. 

Altice USA said that broadband-only customer usage averaged about 558 Gigabytes per month in Q2, a 26% increase and that the average broadband speed taken by customers has nearly doubled over the past three years to 316 Megabits per second in Q2. More than half of its broadband customers subscribe to speeds of 200 Mbps or less, representing an opportunity to upsell to faster service, the company said. 

Altice USA said it continues with its fiber-to-the-home upgrade plans, adding that at the end of the quarter it covered about 1.1 million homes with FTTH technology available for service. FTTH sell-in to new customers is at about two-thirds of net additions in areas where the technology is available, the company said.  Penetration of FTTH passings grew to 4.3% compared to 1.0% in Q2 2020. 

Altice said it also is moving forward with its edge-out program, adding 127,000 homes passed in the quarter (39k homes passed excluding Morris Broadband) and 315,000 homes passed in the past twelve months (160,000 homes passed excluding the acquisitions of Morris Broadband and Service Electric Cable T.V. of New Jersey). 

“As the states and businesses in which we operate have been reopening more widely, Altice USA has seen an acceleration in revenue growth led by advertising and business services,” CEO Dexter Goie said in a press release. “Our residential business remains extremely focused on achieving faster broadband customer growth going forward from a faster pace of footprint expansion and network upgrades including fiber. We are delighted to have announced recently the new Optimum Mobile brand as the first step in the company’s plan to align all its connectivity brands under one national Optimum brand, and we continue to invest in innovative new products such as Optimum Stream to support increased video streaming activity which is driving broadband data usage.”

It may have just been a coincidence, the gods trying to tell me something, a search engine recognizing that I’ve been searching a lot of Comcast stories lately, or given today’s political climate a dark, foreboding conspiracy, but for some reason a Morgan Stanley ad from way back in May (Exceptional Leaders, Exceptional Ideas) popped into the front of my Twitter feed this morning. Featured was a month-old interview between the investment bank’s top media analyst Ben Swinburne and Comcast chairman and CEO Brian Roberts. And though it was obviously somewhat self-serving -- it was an advertisement, for criminy sake -- it nevertheless showed a bit of an insight into the mind of the guy who runs the largest cable operator in the country.

Roberts and Comcast have been at the center of a bit of a firestorm in the wake of a June 23 Wall Street Journal article that hinted that the Comcast chief is looking for ways to jump start its streaming business, and considered purchasing Roku or ViacomCBS. The article stated that Roberts, who declined to be interviewed for the story, has been telling people close to him that he does not see a need for a deal but is looking at all of his options. One of those options, the article stated, is a “potential tie-up” with ViacomCBS or an outright acquisition of Roku. 

So, on the surface, it looks like Comcast doesn’t really see a need to buy something big, but that it’s keeping its options open, and a couple of people who asked not to be named think that it would be a good idea if they bought something. Gee, I wonder who they might be?

Comcast stock dropped about 5% ($2.72 each) to $54.91 per share in early trading June 23 as a result of the fear that it would again spend too much money for an asset -- the other time was its $40 billion purchase of Sky PLC in 2018, according to some analysts.

The stock has rebounded slightly -- it closed at $56.06 on June 24, $56.42 on June 25 and slipped to $56.10 on June 28. Today, (June 29) it was trading at $56.97 this afternoon. 

Despite the speculation that Comcast would pursue another big transaction, the company has been pretty straightforward in saying that major deals are not top of mind. At the J.P. Morgan virtual Technology Media & Communications conference in May, Comcast chief financial officer Mike Cavanagh said that “M&A is not an answer.” 

“We like the hand we have without M&A, but we'll obviously do what's right for shareholders as time passes,” Cavanagh continued. 

Look, I’m no ingenue here. I know that companies sometimes say they don’t want something and then a week later seemingly can’t live without it. It has happened countless times in the history of the media business. And I know that any CEO who hasn’t been at least considering potential pairings to improve their lot in the new streaming paradigm is not doing his or her job. 

I also know that the standard response to “What are you going to buy?” is almost always “We’re looking at everything, but we don’t feel the need to do anything.” Saying anything more or less would run the risk of appearing to act in ways not beneficial to shareholder interests. Show me a company that says we definitely don’t want to buy or sell anything and I’ll show you a class action suit just waiting to happen. 

But sometimes, in the immortal words of Sigmund Freud, a cigar is just a cigar.

Analysts have pointed to three items that they believe will keep Comcast out of the deal market, at least for the time being: regulatory concerns; its aggressive share buyback plan and the seeming failure for any of those potential deals to move the needle that much. 

In Q1, Comcast said it would restart its share repurchase program after a three-year hiatus as it tried to deleverage in the wake of the Sky acquisition. In a research note, Bernstein media analyst Peter Supino wrote that attempting a major acquisition at the same time would be “borderline psychotic.” 

Others have noted the prohibitive size of a potential Roku deal because, with a market cap of $55 billion, any potential bid would have to come in around $75 billion. Most believe that Comcast is probably better off just giving its 29 million broadband-only customers a free Xfinity Flex box, at the much, much lower cost of about $1.5 billion.

They further pointed out that a deal to buy ViacomCBS would face regulatory problems because both own broadcast networks (CBS and NBC). And while Comcast could buy Viacom’s Paramount studio and/or its cable networks, many analysts aren’t sure how far that deal would move the needle for either company. 

Comcast has a history of earth-shaking deals from AT&T Broadband in 2001, to NBCUniversal in 2009 and 2013. But Comcast also has known when it was time to back off -- abandoning its 2004 takeover attempt of Disney, giving up its pursuit of MediaOne in 1999, and more recently abandoning efforts to purchase 21st Century Fox assets in 2018 and Time Warner Cable in 2015. According to cable legend John Malone, Comcast also took a peek at WarnerMedia content assets, opting against a bid because of regulatory fears. WarnerMedia agreed in May to combine with Discovery Inc. in a deal valued at about $43 billion.  

Roberts spent a lot of time during the Swinburne interview talking about the past, how he based his management style on his father Ralph’s, how he looked to other executives for inspiration like Malone, former Comcast CFO Julian Brodsky and even media mogul Barry Diller, with whom he has had a complicated past relationship. 

“I’ve been lucky because I’ve tried to learn from those who came before me,” Roberts said in the Morgan Stanley interview. 

He mentioned how in 1997, he managed to convince Microsoft founder Bill Gates to invest $1 billion in Comcast, a move that gave the cable business instant credibility and injected new life into the at-the-time absurd notion that spending billions of dollars to build fiber networks for something called “broadband.” We all know how that turned out. 

And though Comcast has been under pressure for months to spin off its content assets -- a move many analysts believe would unlock value -- Roberts said he believes content and distribution can work side-by-side, even as other companies are taking a different tack.

In the interview, Roberts said that throughout cable’s history, from Community Antenna TV to today’s mixture of broadband, streaming and linear programming, content has been the constant. 

“Content has powered that all along the way,” Roberts said. “We see the two working together and we’re growing our ability and technology with one platform working together as one company, content, distribution, now aggregation and streaming, in a way that puts us in a very unique and different position than some of those other companies.” 

“We believe in media and technology,” he continued. “The current Comcast, that’s how I would define us. We are a media and technology company. Those two go together. It’s not really vertically integrated, it’s delivering to customers and viewers experiences and memories and things like our theme parks. It relates to the characters and intellectual property that they’re in love with and their kids love.” 

Also Read: Comcast The Wallflower 

Roberts picked two moments as turning points for Comcast: the 2008 launch of Project Infinity at the Consumer Electronics Show in Las Vegas, which paved the way for the current on-demand, streaming environment, and the 2014 decision to incorporate Netflix into its X1 platform.

Project Infinity, Roberts said, was Comcast’s effort to give customers what they wanted in an elegant way, allowing “consumers to have infinite choices of any content that has ever existed or might exist and leave it up to the IP rightsholder to determine whether it was free, advertising supported, subscription, pay-per-view, whatever model fit their business." He added the 2010 effort to rebrand its products under the Xfinity name had its roots in that CES presentation. 

The Netflix integration came after a bit of a spat concerning peering of the service on Comcast’s broadband platform, which raised some hackles across the board. 

“I give [Netflix CEO] Reed Hastings a lot of credit,” Roberts said about how the two companies managed to bury the hatchet. “We both reached out to each other and said we didn’t want to have any more disputes, we wanted to figure out how to go forward. He came to Philadelphia and I went out to visit him and we took long hikes and one day we, with the help of many other people in our companies, broke new ground.”

That included making the Netflix app available on Comcast X1 set-tops, and today Roberts said that in the cable company’s markets, Netflix is the No. 1 streaming app. 

“Today we have Amazon and Apple -- we hope -- and we have Disney Plus and HBO and we have Peacock,” Roberts continued. “Some are our own, some are long term partners, some are new relationships. We want to say to these companies we are trying to find win-win outcomes. That can be hard at times. And you can have tension in relationships. The key is to try to navigate that and have a company that when you finally agree on something, you deliver. In fact, you overdeliver. I think that is what happened with Netflix and I think Reed has gone out of his way to acknowledge that.”

Roberts admitted that at first he was reluctant to go full bore into the new strategy, adding that it took some time for him to digest. But it wasn’t long before he was on board.  

”It goes back to culture. Do you have people sitting around a table challenging each other, or is it hierarchical,” he said. “We had to prove that we could evolve our company.”

That evolution, he said, requires not only listening to its own executives, but those outside the company walls as well. He remembered a conversation he had several years ago with late Apple founder Steve Jobs, where Jobs suggested that Comcast incorporate WiFi into all its set-top boxes. 

“I honestly wasn’t sure exactly what he meant,” Roberts said. “But I can tell you, we were pretty quick. We now have more WiFi than any company in America, and we put it in all our cable boxes. So sometimes you get ideas from all over the place, friends, competitors, other outside influences. I think it's important that you have a culture where you really try to rip up your playbook every day and make sure you have the right playbook tomorrow.” 

So, will Comcast go on a buying spree, or will it not? For now, the smart money seems to be on the latter. But then, again, that all depends on the playbook. 

Apparently, presiding over a media giant that sits astride two continents and multiple distribution platforms isn’t quite enough for Comcast’s second-generation CEO Brian Roberts, who reportedly wants to add little side hustles like Roku or ViacomCBS to keep up with, well, everyone else, despite everything he already has. 

A Wall Street Journal piece Thursday said Roberts wants to beef up Comcast holdings, either with a lot more content, or yet another distribution platform, or perhaps both. Well, of course he does. 

But while buying America’s best-selling streaming hardware maker, or the biggest of Hollywood’s few remaining independent broadcaster/cable/movie studios, makes plenty of business sense for Comcast, it makes far less political sense given current sentiment in Washington, London and Brussels.

A key U.S. House committee this week approved a far-reaching set of antitrust bills that would prevent companies from engaging in conduct that advantages their own products or services on a platform, or puts competitors at a disadvantage, or even that discriminates against similar business users. 

While the legislation largely targets the Big Tech firms whose digital platforms dominate so many parts of our lives, the bills could set plenty of landmines in front of Comcast or other media companies trying to catch up in the latest round of Hollywood consolidation.

To pass, the bills faced down a furious lobbying effort by tech and other business interests, and it’s harder to read their prospects in the evenly divided Senate. But even there, conservatives who might traditionally oppose any kind of business restrictions want tougher controls over social-media and online companies they feel are censoring them. Out of such grievances are cross-party political coalitions crafted.  

And the Senate did just sign off on Lina Khan’s appointment to the Federal Trade Commission. President Joe Biden then named Khan FTC chair, cementing in power a former law professor and Congressional aide who built her reputation calling for an overhaul of antitrust policy in the digital era.

The FTC has already asserted jurisdiction over Amazon’s $8.45 billion acquisition of MGM, on top of another investigation in Amazon’s pricing practices with its third-party sellers. 

Again, it’s easy to understand why Amazon wants to overpay for MGM’s fat library, which it hopes to mine endlessly for Prime Video remakes, reboots and spinoffs that it can own forever. 

But Khan’s ascendance suggests the MGM deal, and any acquisition big enough to stir Brian Roberts’ soul, will get far more than a cursory review and rubber-stamp approval. 

Antitrust concerns aren’t limited to North America either. UK regulators want to bring international streaming services on its shores under the same programming and other strictures facing traditional broadcasters there. The EU continues to aggressively regulate anti-competitive behavior, with most of the tech giants in the middle of various expensive investigations over their practices. 

All of which suggests that what’s happening is a fundamental shift in understanding, among creators and regulators both, of the power of distribution platforms. 

Hollywood always said content was king, presuming that its hot shows would magically open distribution channels desperate to attract users. Then a couple of things happened. First, everyone started making way more good content than any normal human could watch. Second, HBO Max and Comcast’s Peacock got stoned for months when they tried to sashay onto Roku’s platform this time last year. 

This understanding of platform power is also playing out on the game side. This past week, Microsoft’s Satya Nadella used his Windows 11 debut event to throw shade at competing app stores that don’t allow access by competitors. 

Nadella never mentioned by name a certain fruit-associated $2 trillion company (the only one worth that much besides Microsoft), but Nadella didn’t have to, three weeks after the end of testimony in Epic Games’ landmark antitrust lawsuit against Apple over its App Store practices. 

And all of this jockeying is only partly about streaming video and games right now. It’s also about who’s going to control the next generation of devices beyond mobile, in augmented- and virtual-reality devices. 

Amid those kinds of big-picture strategic imperatives, adding Roku and ViacomCBS to Comcast’s quiver seems almost like a retro idea straight out of 2007 or so. But it still isn’t likely to look good to regulators. 

Comcast is already soup-to-nuts in production, distribution, and delivery of video in just about every current form. Truth be told, it’s difficult to figure out what the Comcast octopus doesn’t already do. And that’s exactly why any big deals seem doomed to a difficult birth at best. 

Comcast already has more broadband than TV subscribers, and it’s still the nation’s biggest traditional cable provider. It already owns a Roku quasi-competitor, the Flex streaming box. And the WSJ said Comcast is collaborating with Walmart and Hisense to build branded smart TVs expected to hit store shelves as soon as this winter.

Comcast also has analogues to everything ViacomCBS does, from its own broadcast network to a sheaf of cable networks, a movie studio and TV production unit. On the streaming side, both own major SVOD and AVOD networks already. 

Adding to possible antitrust concerns for the European Union and a newly activist post-Brexit UK, Comcast also owns Euro satellite power Sky and its many production arms.

Brian Roberts faces plenty of pressures beyond a filial sense of duty to build up his birthright, including from activist investor Trian Fund Management LP, which questions Comcast’s current mashup of content and distribution. 

Other investors are unimpressed by Comcast’s growth prospects, pricing its stock at a far lower earnings multiple than competitors Disney or Netflix, whose respective production facilities are a couple of miles either way from Universal City, where NBCUniversal is headquartered. Even No. 2 cable operator Charter Spectrum has a higher multiple, which has to grate. 

The spring was filled with what the consultants like to call M&E M&A, some 410 deals in media, entertainment and telecom, totaling $83 billion in value, according to PwC in its mid-year report on the state of play. 

It was, the report said, “the highest level in years … As these media giants compete with the likes of Netflix and Disney, we expect to see a continued race for content and sports rights, as well as further consolidation among other streaming providers and studios as they seek the scale needed to remain competitive.”

No matter. Now that Biden has scored victories on other legislative priorities, and signaled his regulatory intent with key appointments at both the FTC and the Department of Justice, it likely will be far more difficult to secure approvals for game-changing deals going forward than it was just six months ago. 

At least until we see what happens with the MGM-Amazon deal, media companies may be better advised to hunker down. That’s particularly so for Comcast and NBCU, which have to  white-knuckle it through whatever the pandemic-cursed Tokyo Olympics become next month.

Then, Roberts and his company can figure out where to allocate their capital going forward.

Here’s an idea: instead of sinking tens of billions of dollars into an acquisition that might get tossed out by the Biden Administration, maybe spend more to make your own content, so you can keep up the old school way. Maybe content is king after all. 

After a pandemic-induced slowdown, ad tech mergers and acquisitions (M&A) are on the rise, with many companies seeking efficiencies and expanded footprints, including connected TV (CTV) offerings. During the pandemic, consumers’ CTV consumption increased dramatically, reflecting its unique ability to connect with highly-targeted audiences across the content they crave, and audiences show no signs of slowing down. According to eMarketer, by the end of 2021, nearly 83% of households will have at least one connected TV used by at least one person every month. Advertisers are responding accordingly, by increasing investment in CTV. In Q4 2020, ad-supported streaming soared, with ad impressions increasing by 31% year-over-year, according to an industry report. By 2021, US CTV ad spending is on track to reach $11.36 billion, compared to $8.11 billion in 2020. By 2024, eMarketer estimates US CTV ad spending will reach $18.29 billion.

Recent M&A transactions have enabled businesses to create more robust and efficient advertising solutions for both the demand and supply sides while keeping pace with industry trends — including increased consumption of CTV, the need for advertisers to pivot away from cookie-based audience approaches and the expectation for simplified, omnichannel ad buying. So, what trends do these transactions reflect? Why is M&A in ad tech accelerating around CTV, and what do these moves say about the future of the industry? Let’s consider what’s driving these deals, and why consolidation should be seen as a good thing for advertisers, publishers and even audiences.

What are buyers and sellers looking for in a CTV offering?

Advertisers need to be where the people are and, increasingly, that is CTV. Media companies and advertising platforms are making moves to add CTV and digital video advertising products to their programmatic tech stacks to create solutions that ensure data integrity between platforms, facilitate supply path optimization (SPO), enable retargeting across channels, improve performance and simplify processes. Moreover, some ad tech companies are unifying supply and demand-side solutions, connecting the dots across multiple demand-side platforms (DSPs) to ensure optimal data-based targeting and enhanced efficiencies for both sides.

While managed service solutions will always have their place, self-service platforms are driving growth for buyers and sellers in CTV. In the last two quarters of 2020, Tremor experienced a 200% increase in revenue from self-service deals. Publishers expect solutions for optimizing monetization strategies across all media. Agencies and brands are looking for more control over their data, targeting, campaign optimization and post-campaign analytics, in part because more brands are bringing elements of their marketing in-house. Ultimately, these full-stack solutions should improve advertising for consumers, too, as advertisers and publishers use enhanced controls for targeting and frequency capping to improve ad relevance and preserve the CTV user experience.

How does consolidation create a competitive advantage?

CTV is a way to stand out, as not every media company offers it. Consolidation is a means to creating or expanding CTV offerings. It is also a strategy for achieving reach and scale and improves a company’s ability to compete with walled gardens and larger media companies with vast audiences.

Advertisers are also consolidating by merging teams and ad budgets. While TV and digital teams were historically separate entities, CTV’s fast growth is changing how the supply and demand sides structure their organizations. Buyers are increasingly channel-agnostic. They want to be where their audience is — whether that’s Facebook, cable TV or Netflix. Linear TV will continue to evolve — both in its targeting capabilities and ease of buying and selling — to complement digital channels including CTV.

What will the dawn of a cookie-less future mean for CTV’s growth?

Another driver of M&A action is the forthcoming deprecation of cookies. CTV is inherently cookie-less, which could entice advertisers to reallocate budget from digital to CTV as the space navigates targeting in a cookie-free world. Data will still be accessible, as users will opt in to choose if and how they share data between multiple platforms — but achieving scale will be more challenging. Based on industry estimates I’ve seen, cookie match rates hover around 50% to 60% between buyers and sellers, meaning about half of users are not targetable from one platform to the next. The market is hungry for alternative targeting solutions, such as identity graphs and consent-based third-party data, household-level data, second-party data, contextual data, cohorts and, of course, first-party data.

Despite new targeting options, scale could still prove challenging for advertisers targeting niche audiences. Likely, they will look to supplement audience targeting with contextual targeting. This is already happening on CTV, as advertisers strive to advertise alongside certain content — the same way they would approach linear. Fulfilling these requests hinges on supply-side relationships, not just data.

It’s worth noting that mergers and acquisitions are also strategies for competing on the R&D side. Ad tech and media companies are spending millions, even billions, to keep up with industry trends, especially when it comes to CTV. Joining forces helps businesses keep pace.

Rapid-speed development and the next wave of M&As around CTV should usher ad tech into its next phase of maturation — one in which advertising is simple and effective, regardless of the channel, and optimizing monetization strategies for publishers is streamlined across all media.

Guest blog author Kenneth Suh currently serves as chief strategy officer for Tremor International where he manages the global exchange business of Unruly and is responsible for business and corporate development initiatives across the company. Before joining Tremor, Suh served as COO and CSO at Unruly, which he joined in 2014.

Comcast chief financial officer Mike Cavanagh addressed the elephant in the room at the JP Morgan virtual Technology, Media & Communications conference Wednesday, telling the audience that while the company will look at every opportunity, it doesn’t believe it needs to do a big merger deal to survive.  

Cavanagh said that Comcast has the bandwidth to do deals and would look at any opportunity through a strategic lens. But he said there are other factors to consider, including whether an asset can be had for the right price, will add value and can help further execute the overall business strategy.

"Obviously, we know how to do that if necessary," Cavanagh said. "But hear me loud and clear: We like the hand we have, and M&A is not an answer. We like the hand we have without M&A, but we’ll obviously do what’s right for shareholders as time passes."

Cavanagh's comments come shortly after John Malone, who agreed to convert his super-voting shares in Discovery to facilitate the WarnerMedia deal, said that Comcast chairman and CEO Brian Roberts had considered merging with WarnerMedia but backed off because of regulatory concerns.  

Analysts have wondered what effect WarnerMedia’s pending merger with Discovery will have on the rest of the business, and several have speculated that it could force companies like ViacomCBS, Comcast, Fox and Disney into looking for big deals. On Wednesday, Amazon said it would purchase movie studio MGM for $8.45 billion, a move that most likely wasn’t motivated by the Discovery deal. But the Amazon/MGM deal is another example of how even large streaming video providers feel they need more scale. 

Comcast, which has about 42 million signups to its own streaming service Peacock, has been under some pressure from analysts who have speculated that spinning off its NBCUniversal programming business would unlock value. At the JP Morgan conference, Cavanagh didn’t talk about spinoffs, but said that making acquisitions doesn’t always lead to success. 

"Just because you own something or buy it from the other guy, it doesn’t mean you’re going to operate it well," Cavanagh said. "So, we’ve been very focused on making sure when we acquire stuff, we do not take lightly the ability to operate well, execute well. And that’s critical if you’re going to go about it that way."

He added that M&A isn’t off the table, but there are other ways to gain scale, including partnering with other providers and investing in more content. 

"We can do what we need to do in a variety of different ways--invest in content as it is appropriate, partner with other people in some markets as it’s appropriate, and certainly we can consider M&A," Cavanagh said. "But there are a whole host of things you’ve got to face up to if you’re going to go down that third route."

Altice USA said it has agreed to purchase Morris Broadband, a high-speed data, video and voice services provider based in North Carolina, in a deal that implies a $310 million enterprise value. The deal is expected to close in the second quarter of this year.

Morris Broadband has about 36,500 residential and business customers in western North Carolina locations like Hendersonville, Franklin, Sylva, Nebo and West Jefferson, and passes about 89,000 homes with a service penetration rate of about 35%. Altice USA already has a presence in the state with its Suddenlink Communications business. The company said after the deal is closed North Carolina will be its sixth largest state of operations. 

According to Altice USA, Morris Broadband reported EBITDA of about $13 million in the fourth quarter, representing a purchase multiple of about 24 times its last quarter annualized cash flow, before synergies. Altice said the multiple shrinks to about 7.4 times cash flow once those synergies are considered.  

“Morris is a perfect fit for Altice as we are accelerating our network expansion with increased investment in edge outs, upgrades of underdeveloped systems and FTTH deployment to drive customer, revenue and cash flow growth,” Alice USA CEO Dexter Goei said in a press release. “We look forward to providing our high-quality broadband, video, mobile, and news offerings to thousands of additional homes and businesses, with a great opportunity to further penetrate Morris’ existing homes passed and by expanding more into adjacent areas.”

This is the second small cable deal Altice USA has made since it purchased Service Electric Cable TV of New Jersey in July for $150 million. The company had made a joint bid with Rogers Communications for Atlantic Broadband parent Cogeco, whereby Altice would have received the U.S. cable operator for about $3.9 billion, but that deal was rejected. Since then, Altice said it would focus on smaller M&A deals to fill out its footprint.   

“It has been a pleasure for the Morris Family to serve the residents of western North Carolina for the last 12 years,” said Morris Broadband chairman William “Billy” Morris III in a press release. “We are confident that Altice will continue to provide superior services to the region.”

As part of Altice USA, Morris Broadband will benefit from enhanced scale, operating efficiencies and further investment support that are at the core of the Altice business model and strategy, including accelerated new homes build. Altice USA’s commitment to innovation, best-in-class services, long-term network investments and customer service creates significant benefits and long-term value for customers, employees and shareholders.

Altice USA intends to finance the transaction with available liquidity. Moorgate Securities acted as financial advisor to Morris Broadband in connection with this transaction.

Just four months after finalizing a deal to take a minority equity stake in cable operator Hargray Communications, Cable One said it will buy the remaining interest in the company in a transaction that values the operator at $2.2 billion. 

In October, Cable One closed a deal where it swapped its systems in Anniston, Alabama for a 15% equity stake in Hargray. The most recent deal, a mix of cash, equity and debt financing, is expected to be completed by the second quarter. In a press release, Cable One said the deal will give it an expanded presence in the Southeastern market -- Hargray operates in 14 locations across Alabama, Florida, Georgia and South Carolina -- and allows it to tap into Hargray’s fiber expertise.  

“We look forward to further partnering with Hargray to extend our presence in the Southeast through Hargray’s fast-growing markets, like-minded strategy, and commitment to providing fast and reliable internet service to rural markets,” Cable One CEO Julie Laulis said in a press release. “This transaction will also serve as a potential platform for future organic and inorganic growth in the region as we look to continue to expand our footprint.”

According to Cable One, Hargray generated about $128 million in annualized Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA, a measure of cash flow) on an annualized basis for the quarter ended Dec. 31. Cable One said it expects to realize about $45 million in annual run-rate synergies within three years of the close of the deal. 

Cable One has been an aggressive buyer of properties over the past few years. In October it said it would buy Mega Broadband Investments, parent of Vyve Broadband, for about $547.1 million.  The most recent deal would be its sixth transaction since 2017, when it purchased New Wave Communications for $735 million.  

Related: Cable One to Launch IPTV Offering

“Cable One and Hargray have remarkably similar cultures, starting with each company’s focus on delighting its customers," said Hargray chairman and CEO Michael Gottdenker in a press release. "Having led Hargray for nearly 14 years, and having gotten to know Cable One well over the past few years, I am excited about this transaction and am confident that our colleagues, customers, and communities will continue to thrive under Cable One’s ownership.”

Hargray is owned by the Pritzker Organization, the merchant bank for the Tom Pritzker family. Tom Pritzker is also executive chairman of Hyatt Hotels Corp. Other investors in Hargray include Stephens Capital Partners, Redwood Capital Investments, WaveDivision Capital, and management.

The purchase price represents a multiple of about 17.2 times Hargrave’s annualized EBITDA, and 12.7 times cash flow assuming the synergies are realized immediately. 

Cable One said it plans to finance the transaction with a combination of cash, its revolving credit facility and the issuance of new equity. The company said it has received a $900 million bridge loan from J.P. Morgan and Credit Suisse to finance a portion of the deal. 

Cable One intends to finance the transaction with a combination of existing cash resources, revolving credit facility capacity, and proceeds from new indebtedness and/or equity capital. Cable One has received $900 million of definitive bridge loan commitments from J.P. Morgan and Credit Suisse to finance a portion of the purchase price.

Credit Suisse acted as lead financial advisor to Cable One, and J.P. Morgan also acted as financial advisor to Cable One. Cravath, Swaine & Moore LLP acted as legal advisor to Cable One on this transaction.

With its nearly $4 billion bid to acquire Atlantic Broadband all but a memory, Altice USA CEO Dexter Goei told analysts Wednesday that the company still wants to grow via acquisitions, and has its eye on a handful of potential “bite-sized” deals. 

“We definitely want to go out there and find attractive MVPDs to acquire,” Goei said on a conference call to discuss Q4 results. He added that while there are a handful of smaller operators to acquire, that field is narrowed, due to geographic and competitive reasons, is further narrowed down to “a couple.” 

Altice USA teamed up with Canadian telecom company Rogers Communications to launch an unsolicited bid for Atlantic Broadband parent Cogeco in a deal valued at about $7.8 billion. Altice USA originally said it would spend $3.6 billion for Atlantic Broadband, upping that bid to about $3.9 billion, but was continuously rebuffed by Cogeco’s controlling shareholder. After several attempts to get a deal done, Altice USA officially abandoned the effort in November.  

Also Read: Altice and Cogeco: He’s Just Not That Into You 

Goei echoed his Q3 comments concerning future M&A, in that small deals, like its July purchase of Service Electric Cable TV of NJ for $150 million, are just as appealing as the bigger transactions.

“The bite-sized, Service Electric-type acquisitions are very attractive for us,” Goei said. “Hopefully, we’ll be able to unlock one of those this year. But we’ll continue to try to unlock as many of those as possible.”

Goei said that in the absence of M&A, Altice USA would use those resources to buy back its stock. But he added he wouldn’t turn down a large deal if it came along.

“If something like an Atlantic Broadband comes up for sale, or even a larger size than that, we definitely continue to believe that M&A is the best use of our capital if anything is available,” Goei said.

While Altice USA CEO Dexter Goei is still holding out hope that its latest offer to buy Canadian cable operator Cogeco will be accepted, he is cognizant that right now, the odds don’t look so good.

Altice USA made its first offer for Cogeco on Sept. 2, a $7.8 billion joint offer with Canadian telecom giant Rogers Communications. Altice would buy Cogeco’s U.S. operations -- Atlantic Broadband -- for $3.6 billion, while Rogers would snap up its Canadian businesses for $4.2 billion. That offer was quickly rejected by Gestion Audem, the holding company for Cogeco’s founding Audet family’s controlling interest in the company. In rejecting that offer, Cogeco executive chairman Louis Audet, also the controlling member of Gestion Audem, said the family had no intention of selling its interest, adding that its stance was “not a negotiating tactic.” 

That didn’t stop Altice from sweetening its offer by about $600 million to $8.4 billion -- $3.9 million for Atlantic Broadband -- on Oct. 18,   adding that the company had until Nov. 18 to accept the bid. Gestion Audem wasted little time to reject the new offer, adding that same day that “Since this is apparently not registering with Rogers and Altice, we repeat today that this is not a negotiating strategy, but a definitive refusal.”

Goei, during a conference call with analysts to discuss Q3 results on Thursday, admitted that it looks like a Cogeco deal won’t materialize, but he wasn’t folding all of his cards just yet.

“We’re very cognizant that the controlling shareholder needs to be acquiesced,” Goei said on the conference call. “Based on his rhetoric and his statements to date, I think it's fair to say that there is a low chance of us collectively with Rogers being able to move forward on this project. Formally we’ve got until Nov. 18, so we’ll see if anything shakes out.”

Although it seems unlikely that Atlantic Broadband will be joining the Altice fold anytime soon, Goei said he was encouraged by the M&A opportunities that exist in the U.S. market, particularly with smaller operators. He pointed to Altice’s July purchase of Service Electric Cable TV of New Jersey, which he said has grown since the purchase with little extra effort.

“We are out there looking at a handful of things,” Goei said, adding that given Altice USA’s 21-state footprint, there are several opportunities to find small systems contiguous to its operating area. 

“It’s not necessarily that easy to unlock all of this, but given the environment, given the interest rate environment, given that size does really matter here in terms of getting operational synergies and investing heavily in technology and customer service, it is starting to percolate that some of the smaller operators, the Mom and Pop guys, are looking to deal,” Goei said.

He pointed to Service Electric, which needed some investment in its network and didn’t have a consistent marketing strategy when Altice first bought it, and has responded well with minimal effort. 

“We’re seeing a lot of low hanging fruit just by adding two or three additional sales people both on the SMB side and the B2B side that’s been very lucrative for us just increasing penetration out there, bringing new products and we’re upgrading the network as quickly as we can,” Goei said. “Everything that we are able to get our hands on in terms of M&A opportunities will be the best use of our capital.”

Altice USA expects about $1.1 billion in proceeds from its sale of a 49% interest in its Lightpath division to Morgan Stanley Infrastructure Partners. While that money could be used to help finance system purchases, Goei added that if no M&A opportunities are found, the next best use for that cash could be share repurchases.

ViacomCBS CEO Bob Bakish tried to tamp down speculation at an industry conference Wednesday that the death of its largest individual shareholder Sumner Redstone would lead to asset sales, adding that while Redstone’s influence was great, it won't change the company's current path.

Redstone died on Aug. 11.  The former Viacom chairman was the controlling shareholder of National Amusements Inc., which holds more than 80% of the voting rights of ViacomCBS. While he was alive, Redstone repeatedly blocked the potential sale of assets -- most notably a move by former CEO Philippe Dauman to sell off an interest in movie studio Paramount Pictures. Upon his death, some have speculated that his daughter, ViacomCBS vice chair Shari Redstone, would be more open to selling off assets or even the entire company.

At the virtual Bank of America Merrill Lynch 2020 Media, Communications and Entertainment Conference on Wednesday, Bakish tried to put an end to any rumors that the ViacomCBS was readying itself for a fire sale. 

“Sumner was a true industry titan,” Bakish said at the virtual conference. “His influence in the entertainment landscape cannot be overstated and his guidance and leadership certainly have left a permanent stamp on our company and helped shape who ViacomCBS is today. But as it relates to M&A or asset sales, the fact is nothing changes as a result of his passing.”

Bakis said ViacomCBS remains committed to unlocking the value of its recombination, which was completed back in 2019 and added that there is more to be extracted. 

“In regard to asset sales, our business strategy is focused on three interrelated businesses -- studios, networks and streaming," Bakish said. "If an asset falls into one of those three categories, we view it as core to our business. If it doesn't, we view it as a candidate for disposition.”

He noted that ViacomCBS already has identified two assets for sale -- CBS’s Black Rock headquarters in Manhattan and publisher Simon & Schuster.  

“The good news is we’ve seen significant interest in both assets,” Bakish continued. “And while we’re not doing anything at the moment, we do look forward to proceeding with those sale processes as market conditions allow.” 

Cable One said it has “upsized” its previously reported public offering of additional stock, now planning to raise about $425 million in shares to help pay off debt and for other corporate purposes, including funding possible future acquisitions.

In a press release, Cable One said it would offer 250,000 shares of its common stock at $1,700 each, for gross proceeds of about $425 million. It had earlier planned to raise about $400 million from the offering. The company added that it has granted the underwriters of the offering the option for 30 days to purchase an additional 37,500 shares at the offering price (raising another $63 million), less the underwriting discount.

Cable One shares have been a top performer in the cable sector, rising about 80% in 2019. The shares are up about 30% so far this year and were priced at $1,802 each (down $13 or 0.7%) in early trading Thursday.

Cable One said in a press release that the net proceeds from the offering will be about $409.1 million, or $470.4 million if the underwriters exercise their option to purchase additional shares.

J.P. Morgan Securities, BofA Securities and Wells Fargo Securities are acting as lead book-running managers for the offering. Barclays Capital, Credit Suisse Securities (USA), SunTrust Robinson Humphrey and TD Securities (USA) are also acting as book-running managers. Co-managers are BMO Capital Markets, BTIG, Citizens Capital Markets, Deutsche Bank Securities, Fifth Third Securities, MUFG Securities Americas, B. Riley FBR, Cowen and Company, KeyBanc Capital Markets, Raymond James & Associates and Stephens.

CableOne said Monday it has started a public offering of about $400 million in new stock, with the proceeds going to pay down debt and for other corporate purposes, including possible acquisitions.

Cable One said it also has given its underwriters the option of purchasing an additional $60 million in shares through the offering.

J.P. Morgan Securities, BofA Securities and Wells Fargo Securities, LLC are acting as joint book-running managers for the offering.

CableOne shares have been one of the top performers in the cable selector for years, rising about 80% in 2019. The stock, up nearly 30% so far this year, was down slightly (1.6%) in afternoon trading Tuesday.

Cable One hasn’t been shy about purchasing other cable companies in the past -- it bought Fidelity Communications in 2019 for about $525.9 million -- but it is unclear as to what properties it would or could acquire. In its conference call with analysts to discuss Q1 results, chief financial officer Steve Cochran said the company would remain disciplined in any transaction, adding that it has had “a variety of things in process,” but that nothing new is happening yet.

“I think there is probably still some level of waiting to see what the markets are going to do from a debt standpoint and another before certain people jump in with opportunities,” Cochran said on the call.

Nevertheless, he said Cable One is interested in “broadband-related acquisitions and investment opportunities in rural markets, as well as capital projects intended to drive long-term growth,” adding that the company also believes there will be opportunities going forward.

Broadcast TV and radio station mergers and acquisitions reached a total of $2.64 billion in the first quarter, most of that attributable to the sale of Spanish language broadcaster Univision, according to Kagan, a unit of S&P Global Market Intelligence.

In February, private equity firms SearchLight Capital and ForgeLight agreed to purchase a 64% stake in Univision for an undisclosed sum. Kagan, using its $3.9 billion valuation of the company, estimated a 64% interest to be worth about $2.49 billion.

TV station M&A in the period was about $2.34 billion, according to Kagan. Kagan valued the TV station portion of the Univision deal at about $2.2 billion.

The current deal volume was well below last year, which Kagan estimated at $6.5 billion. 

According to Kagan, Q1 deal volumes weren’t affected by the COVID-19 outbreak, although the company predicted a steep decline in deals in the next few months, adding that the recovery should be equally as robust. Kagan pointed to some deals already in the pipeline -- most notably the offers for broadcast group Tegna, for its 66 stations across the country as an example.

“That could harbinger a first large deal announcement after the COVID-19 pandemic,” Kagan said.

Aside from the Univision buyout, Kagan estimated the first quarter's largest TV transaction was a settlement between Tribune Media and Sinclair Broadcast Group, in which Nexstar Media Group, the new owner of Tribune Media, will receive Sinclair's Fox affiliate WDKY-TV in the Lexington, Ky., market, along with certain assets of CBS affiliate KGBT-TV in Harlingen, Texas, together with a $60 million cash payment.

The first quarter's largest TV deal announcement with a disclosed price was the $15 million sale of Mega-TV affiliate KTBU-TV in the Houston, Texas, market, from Spanish Broadcasting System Inc. to Tegna.

Netflix reported higher third quarter income as it increased global subscribers by 22% to 158.3 million.

Net income rose to $665 million, or $1.47 a share. Compared to $403 million, or 89 cents a year ago.

Revenue rose to $5.2 billion from $4 billion a year ago.

The numbers exceeded forecasts on Wall Street, where investors were worried about the new streaming competition Netflix will be facing from Disney and Apple this year and AT&T and Comcast next year.

Related: Netflix Snags Global Streaming Rights to 'Seinfeld' Starting in 2021

"Netflix’s subscriber growth got back on track in Q3, as we anticipated, with 6.8 million paid new additions," said Neil Begley, senior VP at Moody's. "Our long range forecast for the company remains unchanged: reaching 200 million subscribers by 2021, with an outside chance of reaching that number in late 2020, and continued margin improvement until the company achieves break-even free cash flow in 2023, when margins reach the mid 20% range."

In the U.S., Netflix added about 500,000 subscribers, below the 800,000 it had forecast.

“Since our U.S. price increase earlier this year, retention has not yet fully returned on a sustained basis to pre-price-change levels, which has led to slower U.S. membership growth,” the company said in its letter to shareholders.

The company added that revenue growth has been accelerating and ARPU increased.

“With more revenue, we’ll continue to invest to improve our service to further strengthen our value proposition."

International subscriptions increased more than forecast. The company added 6.3 million subscribers, up 32% from a year ago and more than the 6.2 million it had forecast.

For the fourth quarter, Netflix expects to add another 7.6 million subscribers. It sees net income of $232 million or .51 cents a share, up from $134 million , or .30 cents a share a year ago.

The additional 7.6 million subscribers Netflix now expects for 2019 is less than it added last year.

“While we had previously expected 2019 paid net adds to be up year over year, our current forecast reflects less precision in our ability to forecast the impact of our Q4 content slate, which consists of several new big IP launches (as opposed to returning seasons), the minor elevated churn in response to some price changes, and new forthcoming competition,” the company said. “As we outline in more detail below, our long-term outlook on our business is unchanged.”

The company acknowledged that new competitors will have an impact on its business. "The launch of these new services will be noisy. There may be some modest headwind to our near-term growth, and we have tried to factor that into our guidance," Netflix said. "In the long-term, though, we expect we’ll continue to grow nicely given the strength of our service and the large market opportunity. "

With more competition on the way, Netflix noted that it is moving increasingly to original content because competitors’ studios have been pulling back content, such as the popular series Friends and The Office. But Netflix added that its own original content is working in terms of member viewing and engagement. Season 3 of Stranger Things was watched in 64 million households during its first four weeks--its most watched season to date, the company said.

Netflix said it is expanding its non-English language originals because they’re growing the company’s penetration in international markets. It said it is also investing aggressively in original films, noting that Secret Obsession was watched by 40 million households, Otherhood was watched by 29 million households and Tall Girl was seen by 41 million households in the first 28 days it was available.

Netflix said that in 2019 it will spend $15 billion on a cash basis on content.

“With so many firms now looking to provide premium video content to consumers, it’s a great time to be a creator of content. Amazing content can be expensive. We don’t shy away from taking bold swings if we think the business impact will also be amazing. We don’t close every deal we chase and we don’t chase every deal on the table,” the company said. “And while not all projects that we do pursue will work out, our large and growing subscription base helps enable us to try many approaches.”

CommScope has completed its $7.4 billion acquisition of Arris.

Eddie Edward, president and CEO of Hickory, N.C.-based CommScope, will lead the combined company that touts around 30,000 workers, 15,000 patents and $850 million in annual R&D spending.

Bruce McClelland, formerly CEO of Atlanta-based Arris, will now assume the role of chief operating officer of CommScope. The company hasn’t publicly discussed any layoffs. But it did say it hopes to experience $150 million in cost synergies in year three of the transaction.

Private equity firm The Carlyle Group will become a minority owner of the combined company with its $1 billion equity investment.

The two combines had combined pro forma revenue of $11.3 billion in 2018.

Announcing the deal in November, the telecom vendors pitched a merger based on mutual interests in wired/wireless convergence associated with 5G, as well as applications like CBRS.

Related: CommScope Buys Arris in $7.4B Deal

“This is a major milestone in the evolution of these two great companies and a significant moment for our industry,” Edwards said in a statement. “With the completion of this exciting transaction, we are creating a new CommScope that will help shape communications connectivity and networks of the future with greater technology, solutions and employee talent. We are committed to building on our well-established track record in prior transactions of meeting or exceeding our synergy targets and generating significant value for shareholders.”

Added McClelland: “Together, we combine great employee talent and experience, an impressive record of innovation and industry firsts, and a sharp focus on creating a world-class customer experience. The entire Arris team and I are eager to get started and help make CommScope one of the top names in technology.”

With the dust finally beginning to settle on a four-way M&A collision involving Disney, Comcast-NBCUniversal, 21st Century Fox and UK satellite TV company Sky, conventional wisdom has emerged that Disney will seek to buy out the remaining shares of joint venture streaming service Hulu.

However, TV[R]EV analyst Alan Work has put forth a rather interesting counter-intuitive argument—it is Comcast which will seek to fully own Hulu.

Related: Comcast Ready to Sell 30% Hulu Stake to Disney, Report Says

Comcast, Wolk wrote in an article posted in Forbes, "desperately" needs an OTT app, given the head start that both CBS and Disney have on them in that department. Hulu could be that app.”

And the analyst wonders where Hulu might fit into Disney's overall app strategy.

For its part, Disney chief executive Bob Iger used his company's third-quarter earnings call in August to describe a multi-app strategy in which Hulu fits in as a "giant aggregated play" along with the ESPN-based sports app, as well as a family-oriented Disney app set to launch next year.

"Obviously, after the deal closes for 21st Century Fox, we'll own 60% of Hulu. So that will fit in very significantly to our app strategy," Iger said.

Earlier comments by Iger, however, apparently have confused Wolk another other analysts regarding Disney's app strategy and where Hulu might fit in. For example, in December of last year, Iger said, “We believe that it’s possible that a consumer may want to basically be choosy in terms of what product they want. Some may want pure family, some may want pure sports, some may want adult."

"That statement confused a lot of us, as it's unclear what the differentiator between Hulu and the adult Disney app will be," Wolk said.

While Wolk may just be misreading Disney's positioning, his argument does have economic underpinning.

Having paid $71.3 billion for the bulk of 21st Century Fox, Disney seems to be focused on reducing some of its debt load--a factor that runs against the grain of acquiring the 40% of Hulu it doesn't currently own.

Related: 21st Century Fox Plans to Sell Stake in Sky

And beyond the cost of acquiring that stake, total ownership wouldn’t be inexpensive, either. Comcast revealed over the summer that its second-quarter losses alone for its 30% of the Hulu platform totaled $107 million.

Comcast’s NBCU division would appear to have plenty of content to support the platform.

“NBCU has a lot of content because NBCU owns a lot of networks,” Wolk wrote. “SyFy, Oxygen, Bravo, Telemundo, USA Network and Cloo are all NBCU channels, along with CNBC, MSNBC, NBC and NBC Sports. Then there's Universal Kids (formerly known as Sprout) and, of course, Universal Pictures, which also includes DreamWorks.”

Earlier in the week, after Comcast won out in its bidding war against Fox for the controlling stake of Sky, CNBC reported that Comcast is interested in selling its Hulu interest to Disney, with Comcast unwilling to own the platform with Disney in control.

Notably, Comcast had been forced to act as a silent partner on Hulu as a regulatory condition tied to its 2011 purchase of NBCU. With that condition recently sunsetted, Comcast appointed three executives to Hulu’s board in September—Universal Filmed Entertainment chairman Jeff Shell, advertising and client partnerships chair Linda Yaccarino and content distribution chairman Matt Bond.

The U.S. Court of Appeals for the D.C. Circuit has declined to overturn the FCC's restoration of the UHF discount on the grounds that the parties challenging it--Free Press, Prometheus Radio--did not have standing to bring the challenge.

That could be a big boost to broadcast M&A, though it might not be the big boost for the Sinclair-Tribune deal given the FCC's other problems with it.

The UHF discount means that only half of a UHF TV station's audience counts towards the 39% national ownership cap. The discount allowed Sinclair to bid for Tribune stations that otherwise would have pushed it to almost double that 39% cap.

“I’m pleased with the court’s decision to reject this challenge to the reinstatement of the UHF discount pending the completion of our comprehensive review of the national ownership cap," said FCC chair Ajit Pai.

During oral argument last April, the judges clearly had concerns about not having statements from individual members of the associations establishing particular harms related to the Sinclair-Tribune deal, which the petitioners used as an example of the harms of the discount. The court wanted the petitioners to have identified at least one Free Press member or Prometheus member in a Sinclair market that would have been affected by the potential merger.

Related: Dems Tell Pai to Wait for UHF Court Decision

The three-judge panel of the court said the argument did not even warrant a published opinion, adding that it did not have to reach the merits of the decision because of that lack of standing.

Those merits were whether it was within the FCC's discretion to reinstate the UHF discount pending “a broader review of the [national ownership] cap” itself after the FCC, under previous chair Tom Wheeler, had concluded it had erred in eliminating the UHF discount before that review.

Since there is no published opinion, it is unclear whether the petitioners could have won on the merits, though two of the three judges appeared inclined to agree with them. Most observers of that oral argument had speculated that, if the standing issue did not derail the challenge, it had a good chance of succeeding and the discount repealed and remanded back to the FCC.

But in a two-page document dismissing the petition to overturn the FCC decision, the three-judge panel said: "Membership organizations may assert standing on behalf of their members, but in order to do so they must show that at least one member “would otherwise have standing to sue in [his or her] own right.”

The court said Prometheus and Free Press did not do that, and it did not accept those showings in a supplement filed after oral argument.

Related: Free Press to Court: Sinclair is Exhibit A on UHF Discount Harms

Now that the court has ruled, Pai is expected to proceed with an item that combines the discount with re-thinking the 39% national audience reach cap to which the discount is tied, perhaps by raising it to 50%, as some broadcasters have asked for, with a review of that move down the line in case it needs some more raising.

Free Press and Prometheus can appeal the three-judge decision to the full court.

Free Press attorney Andrew Schwartzman had no comment on next steps, saying he was still processing the decision and that it was too early to make that call.

"This should remove the cloud hanging over broadcasters, preventing them from further growth. The next, and most important, step is for the Commission to eliminate the national cap altogether," said Adonis Hoffman, former top FCC staffer and currently head of Business in the Public Interest. "Taken together, these actions will give broadcasters the regulatory foundation yo compete in a rapidly changing media market against the likes of FAANG [Facebook, Amazon, Apple, Netflix and Google]."

Equity Research analyst Marci Ryvicker called it a "nice and unexpected positive for the broadcast space."

“This decision is deeply disappointing," said former FCC Chairman and Common Cause Special Advisor Mike Copps. "Rather than decide the merits, the court throws out a major case on a technicality over “standing” that the court itself more than hinted petitioners could easily overcome. On substance, the FCC presented a ludicrous case during oral arguments. There is no defense for maintaining the UHF discount – a technologically obsolete loophole that only allows broadcasters to buy stations beyond ownership limits. It’s more than regrettable that an awful FCC decision that paves the way for more media consolidation is allowed to stand."

“NAB is pleased the court rejected the challenge to the FCC’s decision reinstating the UHF discount," said National Association of Broadcasters SVP Dennis Wharton. "The Wheeler FCC’s decision eliminating the UHF discount without consideration of the national TV ownership cap was inappropriate and ignored the market power of massively deregulated pay TV providers. FCC Chairman Pai deserves enormous credit for righting this wrong, and for providing an opportunity for local broadcasters to better serve our tens of millions of viewers.”

The FCC has yet to release the hearing designation order (HDO), but it is looking more like Sinclair's proposed Tribune deal is headed for an administrative law judge hearing despite the broadcasters' efforts to fix the deal and head off that potentially lengthy process.

The draft order has been changed since it was first circulated earlier this week, but primarily to try to speed the hearing process so it does not become a de facto deal-killer in response to concerns from commissioner Michael O'Rielly, though it appears that may simply be to help the next deal rather than this one.

A source who has seen the final order said that there were "questions of fact on how Sinclair presented information to the commission that have to be resolved through a hearing of some sort, and [FCC chair Ajit Pai] has elected to use the administrative law judge."

Sinclair has strongly denied it did anything wrong and said it made it clear to the FCC who was buying the stations and the sidecar agreements that would be included.

When Pai first circulated the order July 16, he said: “Based on a thorough review of the record, I have serious concerns about the Sinclair-Tribune transaction. The evidence we’ve received suggests that certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law."

On Wednesday (July 18), Sinclair withdrew sales of three stations that appeared to create issues with the FCC. The company said it would sell two of the stations to buyers the FCC liked and keep the third, saying that should resolve the issue.

But the FCC source said the takeaway is no quick fix or resolution is likely.

As to why O'Rielly joined in the vote, an aide to the commissioner said: "He recognizes that, based on the material made available to us, there are questions of fact that need to be resolved and, begrudgingly, what's left right now is for us to send it to an ALJ. Unfortunately, that process is so horrendous that we're not naive in believing we are going to get to resolve these questions of fact."

Sinclair and Tribune have an Aug. 8 breakup date for the deal, so that will need to be pushed back if they continue to pursue it. A court decision on the UHF discount that allowed for the deal could also come out any day; it could potentially unwind the deal as well.

"Commissioner O'Rielly has a long history of criticizing the administrative law judge process," the aide said of the changes to the order. "We shouldn't have a process where if we refer something for a hearing it means a death knell for the hearing. We did what we could to enhance the structure of the ALJ process." 

When asked if that meant it could drag on for a couple of years, the aide said, "It probably could."

The aide said O'Rielly's office hoped it would at least serve as precedent for future hearing draft orders.

At a D.C. event Wednesday, commissioner Brendan Carr also said he fully agreed with designating the deal for a hearing, according to a source at the event. Pai and Democratic commissioner Jessica Rosenworcel had already voted it.

A British regulator has approved 21st Century Fox’s proposed acquisition of Sky as the bidding war between Fox and Comcast over the European satellite broadcaster escalated.

With the approval of the U.K. Secretary of State for Digital, Culture, Media and Sports, Fox said in a statement that all regulatory preconditions to its acquisition have now been satisfied and waived. A committee of independent Sky directors waived the preconditions on their merger agreement, Fox said.

Fox is looking to acquire the 61% of Sky it does not already own.

Comcast might still be standing in the way. After the close of trading on Wednesday (July 11), the cable company raised its bid for Sky to 14.75 British pounds sterling, or $34 billion.

That topped Fox’s latest bid, made Wednesday morning, for 14 pounds per share, or $32.5 billion. Fox’s new bid was 30% higher than its previous offer.

The FCC's voluntary merger review shot clock hasn't been getting much action lately.

The Sinclair-Tribune shot clock stopped in January and probably won't start until at least July 12, the deadline for comment on Sinclair's latest version of the deal, though the FCC is not making it particularly easy to figure out just how that fifth version differs from the others.

Related: Groups Petition FCC to Delay Sinclair-Tribune Decision

The shot clock on the T-Mobile-Sprint merger proposal had not started at press time. The FCC opened the comment docket June 15 but has yet to put the application out for comment.

An FCC spokesperson said that clock won't start until the FCC has determined that the application has been correctly and completely filed.

While media pundits hone their prognostication skills to determine what the next merger candidate will be in the wake of AT&T-Time Warner (besides Comcast-Fox or Disney-Fox), most are dubious that any of those deals will include the companies that arguably started the whole rush for scale: Facebook, Apple, Amazon, Netflix and Google, popularly known as FAANG.

Amazon, according to reports, toyed with the idea of joining Comcast in its $65 billion bid for 21st Century Fox assets, but talks never advanced. Apple also was said to have been thinking of bidding on Time Warner before AT&T announced its deal in October 2016, but again decided to hold off.

Related: AT&T Completes Time Warner Purchase 

While there has been speculation for years about when the big tech companies would make substantial plays for traditional media targets, it’s become clear they might not need to make any big acquisitions to achieve their goals.

Going it Alone’s Good for Netflix

Perhaps the best evidence for that is Netflix itself. Netflix may have toyed with the idea of selling out early in its development, but the company built its current empire largely from scratch, buying rights deals for cable shows and, more recently, leading the industry in originally produced content.

Amazon and Facebook have dipped their toes into programming, but haven’t yet made the major commitment some have expected. Instead, Amazon re-upped its deal for streaming rights for NFL Thursday Night Football and bought rights for a 20-match English Premier League soccer package outside the United States.

Facebook has a deal to stream Mixed Match Challenge, a 12-episode show that airs on Facebook Watch featuring WWE Raw and SmackDown wrestlers, but hasn’t yet made a big financial commitment to video, either.

Amazon, of course, has Amazon Prime Video, which has been growing nicely, offering original scripted series and movies and streaming the back catalogs of other networks. Amazon Studios is expected to continue to be a big player in content, although it will likely lag Netflix, which according to UBS is believed to be spending about $12.6 billion on non-sports content in 2018. Netflix has said it plans to end the year with 1,000 original movies and series, including 470 that will debut in the second half of the year.

Related: Netflix Investing 85% of New Spending in Originals

Despite the lack of activity, Pivotal Research Group CEO and senior media and communications analyst Jeff Wlodarczak said he expects the tech giants to be buyers not builders. Also, there isn’t that much left to buy.

“If Comcast gets Fox, I don’t see that many attractive content assets left for the FAANGs,” Wlodarczak said, although Discovery Inc., which bought Scripps Networks earlier this year, could be a target.

Others say it doesn’t matter. The old way of doing business — studios produce shows and try to sell them to networks, which in turn monetize them in as many ways on as many outlets as possible — is fading away faster than many have expected. Amazon and Netflix don’t sell content to networks: they use it on their direct-to-consumer services. And that may end up being the future as we know it.

Related: Amazon Prime Exceeds 100 Million Subs

BTIG media analyst Richard Greenfield, who has been a big proponent of the new paradigm (and chides the old one with the hashtag #goodluckbundle), sees the tech companies sitting out this merger and acquisition wave.

“I wouldn’t expect a flood of M&A,” Greenfield told Cheddar TV. “The media industry, especially after we get through this Comcast- Fox-Disney transaction, it’s a pretty consolidated sector. I think most of the tech companies — take a Netflix, take a Facebook, take a Google — I don’t think they have a lot of interest in buying legacy media companies. I think they’d rather invest and build out content and programming.”

Usual Suspects Might Be Quiet

MoffettNathanson media analyst Michael Nathanson wrote in a note to clients that he couldn’t see a wave of deals in the wake of the AT&T-Time Warner ruling either. Nathanson said CBS could be a target because it offers strategic value through retransmission consent revenue, an OTT presence via CBS All Access and live sports rights. But, he said, if deals between distributors and programmers were that compelling, they would have been done before. He couldn’t remember any past potential deals between distributors and programmers held back solely because of regulatory concerns.

“In all the years, we have never been asked, do you think the DOJ would allow Company X to buy [AMC Networks] or [Lionsgate]?” Nathanson wrote. “Also, it is far from clear who the distribution buyers for these assets will be.”

Comcast’s $65 Billion bid for certain 21st Century Fox assets wasn’t the “shock and awe” offer that many were expecting, but it solidified what everyone in the industry already kind of knew: Brian Roberts is dead serious about adding content scale.

Comcast’s chairman and CEO had in the past expressed interest in the Fox assets — cable channels FX, FXX and National Geographic; TV and movie production studio 20th Century Fox; 21 regional sports channels; and Fox’s 39% interest in U.K. satellite company Sky and 30% interest in online video pioneer Hulu.

In December, Comcast offered Fox about $34 per share in stock, a bid that was higher than the ultimate winner, The Walt Disney Co., but was rejected because of regulatory concerns and the lack of a breakup fee. In its new $35-per-share deal offered up June 14, Comcast has matched Disney’s $2.5 billion breakup fee and has offered to pay Fox’s $1.5 billion termination obligation, should it scuttle the Disney deal.

Comcast telegraphed in May that it was in the “advanced stages” of making a formal all-cash offer. The bid is expected to touch off a potentially bloody bidding war with Disney, which in December announced a deal valued at about $55 billion (not including assumed debt) for the same assets.

Disney has so far been silent on the Comcast offer, and Fox said last Wednesday (June 13) that its board of directors has received the proposal and will review it. The company has not decided whether it will need to cancel the July 10 special shareholders meeting to vote on the Disney proposal. That could perhaps be decided at a previously scheduled meeting of the Fox board of directors on June 20.

Related: Disney, Fox Set July 10 Special Meeting

While the Comcast bid is about 20% more than the Disney offer — but still short of the 25% or higher premium many analysts expected — Pivotal Research Group CEO and senior media and communications analyst Jeff Wlodarczak said a knockout offer would have probably driven Comcast stock into the cellar, and besides, Roberts may believe that Disney won’t be as aggressive as everyone thinks. Comcast shares were already down about 20% this year, mainly because investors feared Comcast and Roberts would do just what they did on Wednesday.

“Sentiment in cable is god awful and massively overdone in my view, which sets the table for significant short squeezes in both Comcast and Charter and Disney,” Wlodarczak  said. “Investors are pricing these names as if the world is falling apart, and Comcast is doing something incredibly stupid, which is simply not the case. Even if Comcast were to pay materially more — say $15 billion — the stock is still dirt cheap and there is logic to a deal.”

Comcast stock actually rose 4.6% ($1.50 each) to $33.82 per share on June 14, signaling that perhaps that sentiment is easing a bit.

Both sides are expected to fight hard for the assets. Disney chairman and CEO Bob Iger has said the Fox deal is a critical piece of his company’s overall direct-to-consumer strategy, giving the content giant more compelling programming and reuniting film properties in the vastly popular and profitable Star Wars franchise (Fox owns Episode IV: A New Hope, the initial 1977 film) and the Marvel Comics universe (Fox holds the film and TV rights to the X-Men and other characters). Iger is not one to back down from a fight, and both sides have the resources to sweeten their offers.

“Release the hounds. The Fox chase is on,” wrote MoffettNathanson principal and senior analyst Craig Moffett in a blog post.

In a conference call with analysts to announce the deal, Comcast focused a lot on its international aspects— it would boost international revenue from 9% of total sales to 27% — but that also could have been for regulators. While the business is truly becoming global, Roberts’s brief explanation of the state of the pay TV industry probably showed his own mindset the best. “We firmly believe that the truly great media companies of the next century will be large integrated entities with multiple growth engines across a wide swath of the global entertainment industry,” Roberts said.

NBCUniversal CEO Steve Burke, under whose purview the Fox assets, if acquired, would fall, said the deal reflects the changing landscape and Comcast’s willingness and ability to adjust to it.

“One thing we know for certain is that more video is being consumed across more platforms than ever before,” Burke said. “We think that will continue for years to come.”

Burke believes not only will the best companies create and broadly distribute their own content, they will sell it to a global audience. “The Fox assets will make us stronger,” he said.

On the conference call after the deal was announced, Roberts praised Fox’s ruling Murdoch family for its excellent stewardship of the assets, comparing Rupert Murdoch’s vision to that of his own father, the late Ralph Roberts, with both building media empires essentially from scratch. “We are, in our minds, the right buyer,” he said on last Wednesday night’s call.

Related: Murdoch Calls Disney Deal a ‘Momentous Occasion’

Both Comcast and Fox have grown their businesses by acquisition, but have taken slightly different tacks. Murdoch is famous for bidding way too much for content assets — like his offer for National Football League rights in the 1990s, which was $100 million higher than the next bidder but put the Fox broadcast network on the map, and more recently buying The Wall Street Journal at a 67% premium. Roberts has taken a more careful approach, seeking out troubled companies that could be snapped up for bargains and turned around quickly like AT&T Broadband and NBC Universal.

Roberts touted those past deals as proof that Comcast knows how to integrate large purchases. But AT&T Broadband was in trouble and managed poorly — the telco had concentrated on phone service while its video operation dwindled. And NBCU had a disinterested owner (GE), a fourth place broadcast network in a four-player field, and a slew of cable networks that were basically neglected. There was a lot of upside for an owner that knew had to run a pay TV business, and Comcast took full advantage.

That philosophy has served Comcast well. Since its IPO in 1972, the average return for Comcast shareholders has been 17.1% per year, Roberts said, far outpacing the S&P 500 Index. To put it more bluntly, $7,000 invested in Comcast stock in 1972 would be worth about $10 million.

“This is our formula, and I’m proud of our 45-year track record,” Roberts said.

But the Fox assets are not in trouble. There aren’t as many clear, major improvements that Comcast can make to boost returns as it did in its other mega-deals.

Related: Roberts Says Comcast Is the ‘Right Buyer’ for Fox

On the conference call, Burke acknowledged the Fox assets were different, but said there is ample room to grow. “[I]t’s more about complementarity; it’s about the fact that we’re very strong in distribution and content in the United States and not as strong in places like India and Europe,” he said.

But to service its new debt, Comcast will need big returns. If its current bid is accepted, the combined company’s overall leverage would balloon to about $170 billion, or about 4.25 times forward-looking cash flow, per Moody’s Investor’s Service. That is about twice its current leverage of 2.75 times, and could jeopardize its investment-grade rating — i.e., its ability to borrow cash cheaply.

The combined entities are expected to have enough free cash flow to repay debt maturities as they come due, which Moody’s said was “very important given the amount of outstanding debt, secular pressures on linear pay TV and slowing cable industry growth.” But the credit rating agency added Comcast’s willingness to increase leverage so much is “a major shift in financial policy.”

Roberts called the extra leverage as a result of the deal “temporary,” adding that his best answer to the debt service question is the performance of the overall business.

“We have a business plan and a momentum,” Roberts said. “With a changing world, we make adjustments.”

Analysts are split as to who may emerge victorious in this modern-day Fox hunt. Greenfield believes Comcast, smarting after backing off its bid for Disney in 2004 and abandoning its pursuit of Time Warner Cable in 2015, doesn’t want to lose a third time and will be very aggressive. Moffett believes if Disney can put together an attractive package of cash and stock, it could end up the victor. Wlodarczak believes Comcast needs Fox more than Disney, and therefore would do whatever it takes to obtain the assets.

But Moffett added that no matter which suitor comes up with the highest bid, there is only one true winner in the deal. “It’s good to be Fox,” he wrote.

Washington — The seemingly endless review of the proposed Sinclair Broadcast Group-Tribune Media merger doesn’t show signs of being wrapped up anytime soon. And that’s fine with the cable and satellite operators opposed to the deal, who are looking to block it, and maybe also get some help from a federal court in the effort.

While the Federal Communications Commission has put the latest iteration of the proposed merger out for public comment — there have been five versions so far — the agency has set a seven-week comment period, slightly longer than most anticipated, which means it won’t be making a decision on the deal until at least mid-July.

That will make it more than a year since the FCC first put the deal out for initial comment.

Cable and satellite operators — and some other interested parties — want the FCC to deny the merger, arguing that it would give Sinclair untoward leverage in retrans negotiations.

The FCC did not restart its informal deal shot clock, currently stuck on day 167, even though it consolidated all five of the Sinclair iterations for comment and is expecting this to be essentially the final version. But it still wants more information on Sinclair’s proposal to be allowed to own two of the top four stations in Indianapolis and St. Louis. The FCC presumes such dual ownership of dominant stations violates its local ownership rules, but in a deregulatory move last fall, it eliminated the absolute prohibition and said it would look at such combinations on a case-by-case basis.

Until the FCC gets that additional information, however, it likely won’t restart the clock, and may not until all the comments are in by July 12.

Factoring In Delay Rumors

There was buzz last week that FCC chairman Ajit Pai could delay the Sinclair decision until after the U.S. Court of Appeals for the D.C. Circuit rules on a challenge to the FCC’s return of the UHF discount. That move paved the way for the deal, but could unpave it if the court throws it out, suddenly making Sinclair’s merger with Tribune Media virtually impossible since it would represent more than 70% national audience reach (which is only reduced to below the 39% national ownership cap thanks to that discount).

Pai has been under pressure from Congressional Democrats to delay the decision, but made no promises other than to say the court case was “a factor.”

Adding to that buzz was a tweet by commissioner Jessica Rosenworcel: “The @FCC just asked for public comment on the Sinclair merger, speeding the way for regulatory approval. But the @FCC is still waiting on a court decision about how many stations one company can own. No way it should rush ahead now before the court acts. The rule of law matters.”

The FCC hardly seems to be rushing at the moment, given that it has allowed seven weeks for comments on the deal before it will be making any decision, and must wait a while after that to vet the comments that might come in at the eleventh hour.

The chairman’s office had no comment on Rosenworcel’s tweet or the decision’s timing; a spokesperson for the commissioner said she was not signaling any inside information about the chairman’s plans, but instead was continuing to say the FCC “should” wait until after the court weighed in.

A Hill source said the thinking by some was that the chairman might be letting the bureau staffers give the deal a fine-tooth-comb review, no matter the timing, given the ongoing inspector general investigation into the FCC’s handling of that merger review. And more than one source has pointed out that Sinclair’s deal tweaks have continued to draw criticism as insufficient to address concerns about retaining too much control of stations being spun off, making it harder — even for a deregulatory-minded commission — to sign off on the deal.

Not Moving Like Clockwork

As to the immovable shot clock, it is unclear exactly what the FCC is currently measuring, anyway. The merger has been in front of the FCC for almost a year, but the clock has remained stopped since Jan. 4 as Sinclair continued to re-file the deal to accommodate antitrust issues with the Justice Department and local ownership rule issues, with the FCC making deregulatory moves that allowed Sinclair to potentially own more stations. But Pai told Sen. Dick Durbin (D-Ill.) earlier this month that the reason the FCC had not restarted the clock in all that time was “because we have not had adequate information upon which to base a decision.”

The most recent request for further data on Indianapolis and St. Louis was yet another one of those inadequate information-prompted requests, so the clock remains stopped.

“The FCC is giving extraordinary scrutiny to the Sinclair merger, as it should,” said Adonis Hoffman, chairman of Business in the Public Interest, which backs the merger. “While the deal is transformative, the rationale for approval should rest on a realization that Sinclair — and every other big broadcaster — is in the fight of their lives against Netflix, Facebook, Apple and other [over-the-top services] that have bigger market caps and no restrictions on ownership. The market has changed in its fundamental form.

“The reality is that if you aggregated the top 10 broadcasters, they would not be as big as Netflix,” Hoffman added. “That is the fundamental issue and the sooner the FCC acknowledges it, the better for all stakeholders, including consumers and investors.”

With its decision to go public with its heretofore unmentioned desire for 21st Century Fox assets currently betrothed to the The Walt Disney Co., Comcast appears to be gearing up for an epic battle that hearkens back to the old media mogul days, when oversized personalities like Sumner Redstone, Barry Diller and John Malone duked it out for control of media properties.

In a statement spurred in part by public filings by Disney and Fox for their upcoming shareholders meetings, Comcast said it was “considering, and is in advanced stages of preparing, an offer for the businesses that Fox has agreed to sell to Disney.”

With that, Comcast took off the gloves, making it clear that it was not only preparing for battle, it was more than ready. It closed its terse statement by stating while no decision had been made “at this point, the work to finance the all-cash offer and make the key regulatory filings is well advanced.”

In other words: Bring it on.

Throwback Move

The media landscape is littered with tales of bare-knuckle brawls between entertainment titans. And the current love triangle that is Comcast-Disney- Fox has jogged some memories back to 1994, when three epic media personalities — Paramount Communications chief Martin Davis, Viacom chairman Sumner Redstone and QVC chief Barry Diller — battled publicly over the movie studio.

Diller, who had worked at Paramount earlier in his career, had been rumored to be interested in making a deal for the studio, but had pulled back at the last minute, according to a 1994 article in Vanity Fair. In that piece, Diller had lunch with Davis at Paramount’s private dining room in Manhattan, deflecting the Paramount CEO’s fears that he was considering a bid for the studio. Two months later, Paramount announced a deal with Viacom, valued at about $8.2 billion. Shortly after, backed by then Tele-Communications Inc. chairman John Malone, Diller launched a hostile bid for the studio for $9.5 billion.

What followed was a five-month bloody battle between the moguls involving lawsuits, poison pills and a lot of finger-pointing. In the end, Viacom emerged the victor with a $10 billion bid. It is unlikely that Comcast will get off that cheaply this time.

MoffettNathanson senior media analyst Michael Nathanson has estimated that Comcast would likely bid about $10 billion more than Disney for the Fox assets. That, he said in a note to clients, is something Disney can easily match.

Nathanson estimated that Disney’s current offer for the Fox assets is valued at about $68 billion, $54 billion in equity and $14 billion in assumed debt. Assuming that Comcast would offer about the same as it did before — it was rejected in the early rounds of bidding because of potential regulatory concerns and the Murdoch family’s distaste for Comcast stock — its cash bid would be valued at about $78 billion in total ($64 billion in equity and $14 billion in assumed debt), according to Nathanson. “We would expect Disney to match that higher bid with $10 billion in cash added in to its existing deal,” Nathanson wrote.

Nathanson has said Iger is determined to win the Fox assets, and believes the Disney chief has “never backed down from making the right long-term strategic moves for his company because of price.”

Comcast CEO Brian Roberts, the veteran of many mega-deals ranging from industry-defining acquisitions like AT&T Broadband in 2001 and NBCUniversal in 2011 to smaller content buys like DreamWorks Animation, is no stranger to asset battles. But he has preferred to take the high road in most of his transactional endeavors. At the same time, Comcast investors appeared spooked by the company’s interest in Fox, with some interpreting it as an indication that the cable company has lost faith in its U.S. distribution business.

Although Comcast has denied that — even as it made a $31 billion formal offer for U.K. satellite company Sky, of which Fox owns a 39% stake — shares in the cable firm have plunged about 20% this year. The public admission of its interest in Fox hasn’t helped either, as Comcast shares were down about 3% since it made the announcement.

That decline has come just as Netflix, once thought of as the cable killer, has risen. Last week, Netflix’s market capitalization briefly touched $153 billion, passing Disney ($152.2 billion) and Comcast ($145.5 billion) for the first time, before settling for a tie with the Mouse House, closing May 24 with a market cap of about $152 billion. Fueling those gains has been an 82% surge in Netflix’s share price since December.

Disney’s Big War Chest

Disney, which has low leverage — about 1.2 times forward-looking cash flow — and $9 billion in free cash flow, can afford a bidding war with Comcast. Nathanson estimated borrowing the additional $10 billion needed to compete with the Comcast bid would increase its leverage ratio to about 1.6 times at the end of 2020, not a major concern for ratings agencies.

Comcast, on the other hand, would see its debt balloon to $164 billion in a Fox deal, according to Moody’s Investors Service. In a note, it said a Fox bid, estimated at about $60 billion for the equity, would drive Comcast’s overall leverage past 4.3 times cash flow, endangering its investment-grade debt rating.

Moody’s placed Comcast’s A3 debt ratings on review for possible downgrade last week, adding that a Fox bid would make it the second highest leveraged media company behind AT&T-Time Warner. Earlier, Moody’s had warned that Comcast’s willingness to increase its debt load that much represents a big departure from past practices and stated commitments and creates “significant doubts for the future.”

But both companies see Fox as an integral part of that future and are expected to bid hard and high. Sanford Bernstein analyst Todd Juenger in a report earlier this month said Disney and Comcast believe the business has evolved to a point where there will be only a few global scale players and Fox is “the seminal defining point,” in determining who they will be.

“And therefore, we think both Comcast and Disney are likely to pay a high price,” Juenger wrote.

The deal by John Malone’s Liberty Global to sell off some of its European assets to rival Vodafone is another step in the international cable giant’s strategy to focus more on its U.K. cable and mobile operations, which after years of investment appear to be turning the corner.

The Vodafone deal will give Liberty Global nearly $23 billion in cash and stock for its cable assets in Germany, the Czech Republic, Romania and Hungary. The deal officially scrubs Malone and Liberty from the German market, Europe’s second-largest, which it had tried for years to dominate. Now that market will be left to Vodafone, already Germany’s largest cable operator, and that country’s No. 2 player, telco Deutsche Telekom.

With the deal, Vodafone will widen the cable TV gap between it and Deutsche Telekom, but the phone company will retain its broadband dominance. After the Liberty deal is closed, Vodafone would have about 14 million cable customers, compared with 3.2 million for DT. According to company reports, Deutsche Telekom controls about 13.4 million broadband customers in Germany, while Liberty and Vodafone will have a combined 10 million.

Some analysts believe the deal will have a rough time obtaining approval, but Liberty Global CEO Mike Fries said it should pass muster with the European Union in about a year.

Related: Regulators Likely to Block or Restrict Vodafone-Liberty Global Deal: Analyst

In an interview with CNBC, Fries said the German market is “screaming for consolidation and a real national challenger.” Germany has been a growing, profitable market for Liberty Global — revenue rose 8.7% in the first quarter and operating cash flow was up 11.8% — although its pay TV subscriber growth has slowed. Still, the properties attracted a hefty multiple.

Fries told CNBC prior to Liberty Global’s Q1 earnings announcement that the decision to sell to Vodafone was simple, as the price was right.

At $22.7 billion, the Vodafone deal values the assets at about 11.5 times 2018 estimated cash flow, a huge premium to Liberty Global’s current trading multiple of about 7 times.

“It’s a premium valuation,” Fries told CNBC, adding that this isn’t the first time Liberty Global has sold assets, noting the 2006 sale of its French properties to Altice N.V. “We’re trying to be agile, smart and see the playing field clearly. Long-term, this is going to be a great transaction.”

But this deal has the potential to be transformative for all parties involved. Vodafone gets another arrow in its quad-play quiver of video, voice, data and wireless services. Liberty Global gets a great payday, but is essentially shedding one-third of its business.

With the Vodafone deal and a pending transaction to sell its Austrian operations to Deutsche Telekom for $2.3 billion (expected to close in the second half of this year), Liberty will pare the number of countries it operates in from 11 to six and its total customers from 22 million to 11 million.

No Brexit Here

With those deals, Liberty Global’s Virgin Media U.K. operations become even more strategically important, as they will represent more than half of Liberty’s total cash flow. And while Virgin Media has struggled in the past — subscriber growth has been sluggish, and with 5.9 million video customers it is a distant No. 2 to top pay TV service provider Sky (23 million) — it has started to turn the corner, at least financially.

Revenue growth at Virgin Media has soared in the past five quarters, from 1.7% in Q1 2017 to 5.2% in Q1 2018. At the same time, operating cash flow has grown from about 1% in Q1 2017 to 5.5% in Q1 2018, Liberty reported.

Liberty is also pumping money into the U.K. business. It rolled out its new advanced set-top for cable customers, V6, to 500,000 households in Q1; the product is currently in 41% of Virgin Media’s homes. And in 2014 it started building a fiber network, called Project Lightning, that is expected to reach 4 million homes by the end of 2019 at a cost of about $3.9 billion.

The buildout has hit some snags and last year was revamped because of delays and problems with independent contractors in some communities. But the project is ongoing, and with $13 billion in cash from the Vodafone sale, Virgin could have the resources to accelerate Project Lightning and perhaps build out its own mobile network.

Mobile is beginning to emerge as a growth area for Virgin, which has about 3 million customers through a Mobile Virtual Network Operator agreement with U.K. wireless company BT. Virgin added 69,000 post-paid mobile subscribers in the U.K. and Ireland in Q1, Liberty Global said, 89% higher than the previous year. Overall, mobile revenue growth has turned from a negative 8% in Q1 2017 to positive 5% in Q1 2018.

In a research note, Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak praised the deal for its robust multiples. For Liberty, he added, the task will be to sustain its financial growth, but there could be room for other deals.

“Like most of the rest of the cable industry, Liberty Global likely remains mainly about sizeable cash flows (and deployment of those cash flows) in 2019,” Wlodarczak wrote, adding that Virgin Media could be a possible target of Comcast, should Comcast’s bid for U.K. satellite company Sky fail.

Fries was encouraged by Virgin’s performance, but also left the door open should a similar opportunity arise.

“We have a really strategically complete business today in the U.K.,” Fries told CNBC. “We’re happy with it, we’re going to create great value over the long term. If somebody comes up and says they have to own it, we’ll pick up the phone, of course. But at this point, we’re happy.”

CBS plans to make an all-stock offer for Viacom that would value Viacom at less than its current market capitalization, according to a report from Reuters that cites people familiar with the matter.

The offer, which is expected to be submitted in the next few days, would put CBS CEO Les Moonves in charge of the combined company for at least two years, the report said.

CBS and Viacom are controlled by the family of media mogul Sumner Redstone, whose daughter Shari Redstone, vice chair of both companies, has encouraged their boards to consider a combination.

CBS’s low-ball bid signals that it thinks it is the more powerful and valuable company. It would also signal that difficult negotiations are ahead.

The two companies has been combined but were split by Sumner Redstone more than 10 years ago. The Two companies considered a combination in 2016.

John Janedis, analyst at Jefferies, said that a recombination of CBS and Viacom faces hurdles, with price and leadership among the key issues.

Janedis noted that similar issues, including governance and management autonomy, were issues the last time the companies considered combining.

“A theme that looms larger this time around is likely carriage for the combined company's networks and any potential dis-synergies,” he said in a note Monday (April 2).

“The challenges on the traditional media distribution models are all very real, though the solutions outside of scale don't necessarily guarantee successful outcomes,” Janedis said. “Assuming press reports are accurate, a take-under would make it very difficult to consummate a deal, in our view. It will be interesting to see to what extent a stalemate could translate to other potential bidders for either asset.”  

Critics of AT&T’s pending $108.7 billion purchase of Time Warner have pointed to the myriad dangers of consolidating large content and distribution companies – but some analysts say the environment is already headed in that direction.

The U.S. Dept. of Justice has already said it would block the AT&T-Time Warner merger, with the parties scheduled to go to court to state their cases on March 19. Whatever the outcome, the rush for scale won’t be slowed, UBS Securities telecom analyst John Hodulik said.

Related: Feds Lay Out Court Strategy for Blocking AT&T-Time Warner

Hodulik — who believes the deal will be approved — cited in a research note the steady decline of traditional TV distributors, the accelerated push for heft and the inevitable move to direct-to-consumer services as catalysts for more deals. Subscribers to traditional pay TV providers have declined by about 50% since 2010 and dipped 14% in 2017 alone, he noted.

OTT Has Changed Everything
“OTT is clearly the future of video distribution,” Hodulik wrote, and is likely the main driver behind the mega content deal between The Walt Disney Co. and 21st Century Fox, Comcast’s unsolicited bid for British satellite TV company Sky and CBS’s moves to revisit a recombination with corporate sister Viacom.

Hodulik argued that government fears that a combined AT&T-Time Warner would limit content choices and drive up prices run counter to the OTT-inspired shift. And if AT&T isn’t allowed to purchase Time Warner, another company will.

Earlier this month, at an industry conference, CBS chief operating officer Joe Ianniello called the current environment an “arms race” to accumulate content needed to drive direct-to-consumer products.

Ianniello said CBS All Access, the broadcaster’s own OTT product, will add six to seven new shows in the next 12 months, just to compete with the likes of Netflix and other providers. “We’re doubling down,” he said.

Hodulik thinks the land rush for content is warranted. He predicted that virtual multichannel video programming distributors such as Sling TV and DirecTV now will nearly triple their subscriber bases from about 5.5 million in 2017 to 15.1 million by 2020.

Watch MCN: vMVPDs by the Numbers

At the same time, pay TV subscribers, down 3.6% in 2017 to 95.4 million customers when vMVPDs are included, are expected to dip another 4.4% in 2018 to 91.2 million, according to the analyst.

Cable Gets Into the Act
Hodulik said traditional distributors dipping their toes in the vMVPD waters — like Comcast and Charter Communications — will make the full plunge in the next few years.

Comcast introduced Instant TV in late September, a package of broadcast and education channels for $18 per month, to compete with Sling TV and DirecTV.

Charter unveiled its “Choice” package — 25 channels for $21.99 per month — earlier this year.

Mostly because of a desire not to cannibalize existing, higher margin businesses, the offerings haven’t been broadly offered. That is about to change, especially as streaming services gain scale, Hodulik believes. He said he thinks it won’t be long before their OTT offerings mirror their existing video packages.

“We believe scale benefits will eventually lead cable to offer streaming TV services out of region, likely in conjunction with a wireless offering,” he wrote.

Qualcomm said its board has unanimously rejected Broadcom’s unsolicited, sweetened bid to acquire Qualcomm for $82 per share -- $60 in cash and $22 in Broadcom stock.

Broadcom announced its revised bid on February 5, calling it the company’s “best and final” offer. Last November, Broadcom originally offered $70 per share -- the same amount of cash ($60 per share), but just $10 of Broadcom shares. Qualcomm rejected that proposal too.

RELATED: Broadcom Sweetens Unsolicited Bid for Qualcomm Bid

Qualcomm said Broadcom’s latest bid “falls well short of the firm regulatory commitment the Board would demand given the significant downside risk of a failed transaction.”

Qualcomm also offered to meet with Broadcom to discuss “the serious deficiencies in value and certainty in its proposal.”

If such a meeting were to be arranged, Qualcomm would have Broadcom be ready to present the “true highest price” it would offer, holding that the $82 per share offer “materially undervalues Qualcomm,” and arguing that the proposal also does not ascribe value to Qualcomm’s proposed NXP acquisition. Qualcomm today extended its cash tender offer for all outstanding shares of NXP.

In response, Broadcom president and CEO Hock Tan said he would welcome a meeting, and that it would be willing to rendezvous today or over the weekend, but was “astonished to hear that Qualcomm is not willing to meet until Tuesday (February 13).”

“We hope that your willingness to meet with us reflects Qualcomm's genuine intent to reach an agreement with respect to our February 5 proposal,” Tan write. “After having met with most of your largest stockholders this past week, we have no doubt that this is their strong desire as well.  We urge you to meet with us without further delay, and stand ready to meet this Saturday or Sunday in New York or another mutually convenient location.”

Dish Network shares were up more than 4% in early trading Wednesday after Citigroup media analyst Jason Bazinet raised his rating on the stock to “buy,” adding the satellite TV service provider could be purchased for as much as $95 per share.

Bazinet did not say that a deal was imminent, only that he believed the ultimate end game for Dish was a sale. And at that price, Dish, which has struggled with subscriber losses at its legacy satellite TV business over the years, would be valued at more than double its current price range of about $43 per share. Most of that value comes from Dish’s wireless spectrum holdings, which Bazinet put at about $1.50 per point-of-presence (POP). That is more than double the price other analysts have placed on the spectrum.

Dish shares rose as high as 4.6% ($1.99 each) to $45.31 per share in early trading Feb. 7. The stock finished the day at $45.10 per share, up $1.78 each or 4.1%.

The gains were likely welcomed by Dish investors, who have seen the stock drop more than 50% since June, when it closed at $66.04 per share.  

Dish has long been rumored to be a target of several different companies over the years, most recently Verizon, which has struggled with its own over-the-top video strategy. While Verizon has about 5 million subscribers to its landline Fios TV product, it is expected to launch an over-the-top video product in the spring after some delays. Buying Dish, the parent of OTT pioneer Sling TV, with about 1.5 million customers, could jumpstart that strategy.

Verizon has repeatedly said it is not considering a transformational purchase – in the telco's Q4 earnings conference call in January, chair and CEO Lowell McAdam said “there is nothing going on right now,” concerning a big media play for the company.

Dish’s spectrum holdings have been a big part of its valuation for years, and the company is beginning to get closer to a federal deadline where it must at least show some progress in building out a wireless network. In the past Dish has said it would only do so with a partner, but that stance has softened as no partner has surfaced. Still, the company’s wireless network must reach at least 70% of the country by March 2020, a deadline that becomes increasingly harder to make the longer a build out is delayed.

Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak said he believes that a Dish sale in the medium- to long-term is inevitable, adding that while Verizon is the most logical buyer, other suitors could step up to the plate.

Wlodarczak pointed to T-Mobile, the third largest wireless carrier in the country, which could probably put the Dish spectrum to better use.

“Verizon claims to have to the best wireless network which allows them to maintain premium pricing,” Wlodarczak said.  “If T-Mobile is able to get Dish spectrum it would put them in a far better position spectrum-wise than Verizon, which would allow them to accelerate the market share gains they are already making.  In addition, the size of Dish’s video base would give T-Mobile leverage to start their own DirecTV-Now like service (recall they just bought a small player in the area).  I believe if T-Mobile goes for Dish it could put pressure on Verizon to come over the top with a more aggressive bid.”

Continuing its fight for Qualcomm, Broadcom said it has made its “best and final” offer to acquire all of the fellow chipmaker for $82 per share, comprised of $60 in cash per share and the remainder in Broadcom shares.

Last November, Broadcom originally offered $70 per share -- the same amount of cash ($60 per share), but just $10 of Broadcom shares.

RELATED: Broadcom Makes $130B Play for Broadcom

Broadcom said its higher, revised offer, already approved by its board, represents a 50% premium over the closing price of Qualcomm common stock on November 2, 2017, the last unaffected trading day prior to media speculation regarding a potential deal between the companies. Broadcom also said it’s a premium of 56% to Qualcomm's unaffected 30-day volume-weighted average price.  

Broadcom also reiterated that its improved offer is premised on several other potential factors, including Qualcomm acquiring NXP Semiconductors for $110 per NXP share, or if that deal is terminated, and also premised on Qualcomm not delaying or adjourning its annual meeting past March 6, 2018.

Qualcomm, which had already rejected Broadcom’s earlier (and lower) unsolicited offer, confirmed that it had received the revised offer from Broadcom and that its board will review it to determine the next course of action.

RELATED: Qualcomm Board Rejects Broadcom Bid

Broadcom expressed confidence that it’s revised proposed transaction would be completed within 12 months of the singing of a definitive agreement, but said it would pay a “ticking fee” in the form of an increase in the cash consideration due to Qualcomm stockholders if a deal was not closed within that timeframe.

Among other concessions, Broadcom said it’s also prepared to pay Qualcomm a “significant ‘reverse termination fee’” if the deal did not pass regulatory muster. The Broadcom board is also prepared to invite Paul Jacobs, executive chairman and chairman of the board at Qualcomm, and another current Qualcomm director to join the board of a merged entity.

When it announced the original bid on Nov. 6, 2017, Broadcom, a top supplier of set-top box and DOCSIS modem silicon, had argued that Qualcomm’s focus on cellular technology would make it a complementary marriage and accelerate the pace of innovation.

Qualcomm said that Broadcom’s earlier proposal “significantly undervalues” the chipmaker. Broadcom on Monday argued that its new offer is “vastly superior to Qualcomm’s standalone prospects” with our without the pending NXP transaction.

Wall street analysts are typically concerned about cable programmers’ cash-flow and affiliate fees during earnings season, but these days consolidation is commanding the conversation.

As earnings season begins for big programmers such as The Walt Disney Co., 21st Century Fox and Viacom, investors are concerned about the scale needed for content companies’ plans to stream direct to consumers.

“While advertising and subscriber trends are arguably not set to improve, they’re also not top of mind,” RBC Capital Markets media analyst Steven Cahall wrote in a note to clients, adding that tax reform and consolidation will more probably be the dominant themes. “There’s likely to be as much, if not more, debate around the [Department of Justice] view of media consolidation as there will be around cord-cutting.”

Disney and Fox have already announced their deal plans. In December, Disney agreed to purchase certain Fox assets for $66.1 billion.

Viacom and CBS are reportedly revisiting the possibility of recombining the companies — they split in 2005 — in a move that in the past many believed to be more favorable strategically to the cable programmer than its broadcast cousin.

Related: CBS, Viacom Form Special Committees to Evaluate Possible Merger

But as ratings have declined and cord-cutting accelerates, some analysts believe drafting a viable direct-to-consumer strategy is more important than ever, and consolidation is the only way to get there. “Viacom and CBS simply cannot wait any longer,” BTIG media analyst Rich Greenfield wrote in a recent note. While CBS already has a direct-to-consumer product in CBS All Access, the analyst said that alone isn’t enough.

The Fox deal would strengthen Disney’s programming dominance, adding Fox’s 22 regional sports networks, its 20th Century Fox movie and television production studio, and cable networks FX, FXX and National Geographic, as well as Fox’s 39% stake in U.K. satellite-TV service Sky. With the transaction expected to close by the end of the year — and already receiving a ringing endorsement from President Donald Trump — Disney appears to be taking the more-is-better approach as the content distribution sands continue to shift.

With viewers increasingly moving away from traditional distribution methods for mobile, over-the-top and online offerings, Disney is bulking up its already hefty content coffers to ensure no matter what method viewers use to consume content, they are likely to run into at least one Disney-owned property. As for sports, Fox’s regional sports assets should add fodder to Disney’s planned ESPN Plus OTT offering, scheduled for later in the spring.

Related: It’s Game On for ESPN After Disney-Fox Deal

Fox Takes a New Stance
Fox, in turn, is taking the sniper’s tack as opposed to Disney’s shotgun approach. By keeping its broadcast network and TV stations, perennial news ratings champ Fox News Channel, Fox Business Network and national sports channels FS1, FS2 and Big Ten Network, Fox is honing in on what it believes can still attract robust ratings and ad dollars — live sports and news. It further solidified that stance with its deal to pay about $3.3 billion over five years for rights to 11 NFL Thursday Night Football games.

Whether either, neither or both approaches win the day remains to be seen. But the fundamental truth behind both moves is apparent — traditional TV audiences are shrinking and are not expected to recover soon.

Disney seemed to verify the real impact of cord-cutting when it revealed in 2015 that sports channel ESPN had lost 3.2 million subscribers in the prior 12 months, a figure that rose to a collective 13 million viewers between 2011 and 2017. Since then the losses for pay TV programmers in general have averaged about 3% to 4% per year, although some networks, such as Fox, have experienced far less erosion.

According to Pivotal Research Group senior research analyst, advertising Brian Wieser, using Nielsen Universe data, the median growth rate for Fox networks improved to -1.6% in December from -1.9% in November. Nielsen’s February estimates show an even sharper improvement (-1.2%) compared to the prior month (-1.6%). But according to the Nielsen data, Fox is one of the exceptions.

Those declines have begun to eat into affiliate-fee growth, although some networks are more affected than others. MoffettNathanson senior research analyst Michael Nathanson estimated that calendar Q4 affiliate fee growth would range from 11% at Fox to -6.9% for Viacom. Disney fees should rise about 2.5% in its fiscal Q1, while Discovery Communications and Scripps Networks should gain 3.2% and 5%, respectively.

Less Subs, Less Ad Bucks
Fewer subscribers and declining ratings (Nathanson predicts a 13% drop in primetime C3 18-49 ratings for broadcast and cable in Q4) translates into lower advertising revenue, and in the calendar fourth quarter, total national TV ad sales are expected to fall 2.7%, according to the analyst. Viacom once again is expected to show the biggest declines (-4.5%), with Disney not far behind at -3.6%.

Despite the erosion of core fundamentals, Nathanson urged investors to focus on names that have affiliate-fee pricing power, exposure to live sports and news and unique global content. “These companies are cheap and should likely hold their value when the next wave of worries come,” he wrote.

Related: T-Mobile Promises to Stir Up Pay TV Market

Layer3 TV (the name refers to the IP layer of the Open Systems Interconnection stack) was founded in 2013 by Jeff Binder, founder of Broadbus Technologies, and Dave Fellows, former CTO of Comcast. Here’s a snapshot of moments that led to the T-Mobile deal:

March 2014: Layer3 TV emerges from stealth mode with a $21 million “A” round led by North Bridge Venture Partners and Evolution Media Growth Partners, billing itself as a “next-generation cable operator.”

September 2014: Layer3 TV opens new headquarters in Denver’s vibrant LoDo district. Colorado had earlier awarded $2.9 million in job growth incentive tax credits along with workforce development and technical assistance.

October 2014: Lindsay Gardner, a pay TV vet late of Fox Networks and Cox Communications, is named content advisory board chair of Layer3 TV, and later takes on the role of chief content officer.

June 2015: Layer3 TV announces a $51-million “B” round.

January 2016: Details emerge about “Umio,” the brand for a pay TV service in two markets in Texas being delivered by Layer3 TV. It later turns out that Layer3 TV was testing the service in partnership with Suddenlink Communications, an early investor.

September 2016: Layer3 TV launches service in Chicago, starting off with a baseline package of more than 200 channels in HD, including local broadcast TV feeds, starting at $75 per month.

March 2017: Starts to offer a small selection of live and on-demand content in 4K.

May 2017: Adds broadband to bundle in the Washington, D.C., market, reselling a 100-Mbps service using Verizon’s fiber network.

Dec. 13, 2017: T-Mobile announces deal to acquire Layer3 TV.

Jan. 23, 2018: T-Mobile closes acquisition of Layer3 TV.

With the acquisition of Layer3 TV now complete, T-Mobile is preparing to do for pay TV what it’s been doing in wireless — shake things up.

How, precisely, T-Mobile will pull that off is the big question as it prepares to launch an over-the-top TV service later this year that will grapple with satellite, cable and telco TV providers as well as a growing array of virtual multichannel video programming distributors.

Related: Layer3 TV's Road to T-Mobile

T-Mobile did drop a few vague hints about what’s in store. For starters, T-Mobile won’t require its pay TV service subscribers to bundle in its mobile services, though it’s possible the company will offer incentives to consumers who do buy its video and mobile services together, and offer options that aren’t saddled with mobile data caps.

Really Going Over the Top
T-Mobile’s pay TV service will also be a true over-the-top offering, in that consumers will be able to access the service through any internet connection, and be able to buy it even in rural areas not covered by T-Mobile’s celluar network.

“We’re not going to give the world another metoo, copycat skinny bundle loaded with trade-offs,” Mike Sievert, T-Mobile’s chief operating officer, promised on a conference call soon after the deal was announced late last year.

An FAQ, posted soon after T-Mobile closed the Layer3 TV deal on Jan. 23, stressed that “[w]e don’t believe in carrier bundles where you’re forced to pay more for things you don’t want.” Interested consumers were also given the chance to register their contact information to receive an “exclusive offer” from T-Mobile.

T-Mobile has offered very little concrete information on how it will price and package the new video service and how it will separate from the pack of other OTT video services such as Sling TV, fuboTV, Philo, PlayStation Vue, YouTube TV, DirecTV Now and Hulu.

In addition to getting Layer3 TV’s technology and talent, T-Mobile is buying its distribution deals with networks and programmers. The question going forward is, how will it be able to create interesting or innovative national or local pay TV packages that adhere to the rights that Layer3 TV has been able to carve out.

Whatever T-Mobile comes up with, its packaging and pricing options will likely expand on and divert from Layer3 TV’s initial approach in cities where service is currently available: Los Angeles; Chicago; Washington, D.C.; Dallas-Fort Worth, Texas; and Longmont, Colo.

Layer3 TV has focused on an in-home, managed IPTV service featuring a cloud-based interface that drives a big bundle of pay TV programming, plus integrations with OTT offerings such as CuriosityStream, Pandora, Xumo, YouTube and iHeartRadio.

In Dallas, for example, the flagship Platinum allHD tier features more than 275 channels and a VOD library of 25,000-plus titles and starts at $75 per month.

As a differentiator, all of Layer3 TV’s set-top boxes (designed by a subsidiary of BMW Group called Designworks) are 4K-ready.

Layer3 TV has not announced subscriber numbers, but has tried some different marketing and deployment strategies. In addition to offering products directly to consumers, it has teamed with a municipal provider (NextLight in Longmont, Colo.) and offered a broadband bundle (using Verizon’s fiber network in Washington, D.C.).

Flanker Brand an Early Strategy
In its earlier days, Layer3 TV also kicked the tires on a flanker brand strategy, teaming with Suddenlink (now part of Altice USA) in Midland and Kingwood, Texas, to offer a service under the “Umio” name.

T-Mobile’s new TV team will be led by former Layer3 TV CEO Jeff Binder, now an executive VP at T-Mobile and part of the senior management team. Binder reports to Sievert.

T-Mobile said nearly 200 Layer3 TV employees have joined the company.

Merger and acquisition activity in the U.S. media and telecommunications industry picked up in 2017, though the value of those deals was lower than in 2016, according to a report by PwC.

Last year saw 876 deals announced, up 29% from the year before. Those deals were worth $138.8 billion, down 31%.

Related: Viacom Shares Dip 7% as Deal Fervor Fizzles

Most of the value of those deals was wrapped up in a handful of what PwC terms megadeals, worth $5 billion or more.

Those transactions were the The Walt Disney Co.’s proposal to acquire TV and studio assets from 21st Century Fox, worth $68.4 billion; Discovery Communications' bid to acquire Scripps Networks Interactive, worth $11.8 billion; and Crown Castle International Corp.’s acquisition of Lightower Fiber Networks, worth $7.1 billion.

PwC said another 15 deals in 2017 were valued between $1 billion and $5 billion.

Related: Comcast's Roberts Downplays M&A Desires

The deals come amid big changes in the media business.

“The traditional media players are refocusing their strategy as they consider what their position will be in the ecosystem and whether they will be part of the next big deal, while non-traditional media players are honing in on the next big value play as they look to have a stake in the new future of [media,]” PwC said in its report.

Bart Spiegel, U.S. media & telecommunications deals partner at PwC, said: “Given the robust deal market in 2017, we expect 2018 to be another banner year as companies look to expand on their capabilities and portfolio. Many of the deal theses underpinning 2017 M&A will continue into 2018.”

Related: The Five Biggest Deals of 2017

In its report, PwC identified trends that will drive deal making and shape the media and telecom landscape. They include the rise of artificial intelligence; the importance of creating authentic user experiences; headline-making mega deals as companies seek scale, access to content, technology and operating efficiencies; growth of internet video, internet ads and gaming; and network upgrades by telecom companies

Comcast stock surged in early trading Wednesday after chairman and CEO Brian Roberts vaguely hinted at M&A opportunities ahead, but quickly retreated after the market realized the cable leader will focus more on organic growth.

Comcast shares rose to a new 52-week high of $43.40 per share in early trading Jan. 24, up 2.3% or 96 cents per share and beating the old mark of $42.90 each. By 11:15 the stock was in the $42.50 range.

Related: Comcast Sheds 33K Video Customers in Q4

Driving the earlier gains were a commitment to buyback about $5 billion of its own shares this year, a 21% lift in its annual dividend and the whisper of a hint by chair and CEO Brian Roberts that the media giant will continue to look at merger and acquisitions opportunities in the space.

On a conference call with analysts to discuss Q4 results, Roberts made a veiled reference to other recent deals, including The Walt Disney Co.’s pending $66.1 billion purchase of certain 21st Century Fox assets.

“With the pace of change in the industry accelerating, many of our peers are reevaluating their strategies, as we’ve seen recently,” Roberts said on the call. “So along the way there may be ways for us to create more value for our shareholders, like we did with NBC Universal.”

Related: NBCU Reports Higher Q4 Profit on Cable Gains

He added that shareholders shouldn’t be surprised that the company looks at every opportunity that comes along. 

“But the bar is set high, and we have been and will remain disciplined,” Roberts continued, adding that the priority is to focus on organic growth. 

Comcast hasn’t been a wallflower in the M&A race, but it has definitely been disciplined. Although its biggest recent deal was its purchase of 51% of NBC Universal in 2011 (it took in the rest two years later), it purchased DreamWorks Animation in 2016 for about $3.8 billion and was in the running for the Fox assets, dropping out in December, less than a week prior to Disney announcing its deal. 

Comcast also abandoned its pursuit of Time Warner Cable in 2015 after it determined it would not receive regulatory approval for the deal. 

While the current presidential administration is believed to be more deal friendly, its stance on deals has been mixed at best. Whether Comcast would attempt to make a big splash on the deal front, especially since it’s not one of President Trump’s favorites, remains to be seen.

Later, Roberts tempered his remarks, adding that Comcast does not need to pursue a deal.

“There is nothing we feel we have to acquire,” Roberts said, offering the company’s concentration on broadband after it noticed a shift in viewing habits and its emphasis on theme parks after buying NBCU as examples.

“Let's leave it at that for now; it’s the kind of thing we will talk about over time,” Roberts said, adding that some analysts have predicted a coming restricting in the industry. “Let’s see if it all plays out that way. There will be more information in the quarters ahead."

For the fourth quarter Comcast lost about 33,000 total video customers, better than some analyst estimates but behind the gains of last year. Broadband subscriber growth also slowed a bit, to 350,000 in the quarter, compared to a gain of 385,000 in 2016.    

Partnerships with pay TV operators, ISPs and other service providers are valuable contributors to Netflix’s subscriber growth and could play an even larger role as the OTT provider looks more deeply into agreements that bundle in the Netflix service. 

Netflix doesn’t break out what percentage of new customers come through its various partnerships with ISPs and MVPDs, but they are a “meaningful contributor, but not a dominant contributor in terms of being a major channel for us in terms of acquisition,” David Wells, Netflix’s CFO, said Monday in the company’s Q4 2017 earnings interview with Sanford C. Bernstein analyst Todd Juenger.

Netflix is a “multi-impression sale,” he added. “If somebody joins us through a partner, it isn’t necessarily because that partner did a specific promotion.”

Spencer Wang, Netflix’s VP of investor relations/corporate development, stressed that, given the regional nature of MVPDs and ISPs, any single partnership isn’t particularly material to Netflix’s global net additions.

That said, the importance of partnerships is growing as Netflix gets “embedded” into more ISPs on more CE devices, Wells said.

Greg Peters, Netflix’s chief product officer, noted that set-top box integrations does give Netflix exposure to consumers who are consuming more linear TV and could be later adopters to the OTT service. Wells also acknowledged that there’s a “churn benefit” to those partnerships.

Peters noted that Netflix is increasingly taking a look at how the service could be bundled with operator offerings.

While that hasn’t happened to a great degree with MSO partners, T-Mobile is already bundling Netflix as part of its “Netflix on Us” promo. Hulu, meanwhile, has a similar deal with Sprint.

RELATED: T-Mobile Gives Away Netflix Subscriptions

Netflix handily beat its sub forecasts in Q4, contributing in large part to consumer interest in Netflix’s content, but Wells admitted that the company was a “little conservative” heading into that quarter following recent price increases.

RELATED: Netflix Adds 8.33 Million Subs in Q4 

“The real driver is to make the big titles bigger,” Netflix CEO Reed Hastings said. “That’s the dominant accelerator.”

Netflix also defended its plan to spend between $7.5 billion to $8 billion on content on a P&L basis in 2018, confident that it’s getting a healthy return on that investment.

“At some point if we see we’re not growing viewing hours, we’re not growing subs, not growing enjoyment, then you’ve hit a point of diminishing returns,” Ted Sarandos, Netflix’s chief content officer, said. “We just haven’t seen that yet.”

Hastings added that he expects that spend to go higher in 2019 and 2020.

The Netflix CEO also weighed in on the proposed Disney-Fox deal.

RELATED: Disney Pulls Fox Trigger

“I was surprised as anyone else that fox was willing to sell,” Hastings said. “And to have all of those cable networks together in one bundle gives them tremendous pricing power against MVPDs…So I could see the attractiveness of it.”

Hastings also expects Disney’s plans to launch direct-to-consumer services in 2018 to be “very successful,” but downplayed the impact it will have on Netflix.

“We don’t see it as a threat to us any more than Hulu has been,” he said, adding later that the whirlwind of M&A activity involving major U.S. media companies “are pretty peripheral to us.”

And don’t expect Netflix to change or alter its business model to include advertising.

Being ad-free “is a core differentiator,” Hastings said. “We’re having great success on the commercial-free path; that’s what our brand is about.” 

The number of TV stations sold rose in 2017, but the value of those deals fell, according to a new report from BIA/Kelsey.

A total of 107 TV stations were sold in 2017, compared with 97 the prior year. Nine of those station deals came in December.

The value of the TV station deals was $4.68 billion, down from $5.28 billion in 2016, BIA/Kelsey said.

Related: Tegna to Buy Two Midwest Television Inc. Stations for $325M

For 2018, BIA/Kelsey noted that the Federal Communications Commission relaxed regulations regarding local ownership of local TV stations and looser rules on television-radio-newspaper cross-ownership.

“While there is some question as to whether some or all of these new regulations will be challenged in the courts, there is some optimism that this relaxation will lead to an increase in station trading activity,” BIA/Kelsey said.

Read more at broadcastingcable.com.

Comcast has officially dropped out of the running for 21st Century Fox assets, saying in a statement that it did not receive the “level of engagement” it believed necessary to make a serious offer, and clearing a path for The Walt Disney Co. to make a bid for the properties later this week.

The news was first reported by Reuters.

Comcast has been in talks for weeks about purchasing a mix of assets including the 20th Century Fox film and TV production studios, cable channels FX and National Geographic and Fox’s 39% interest in European satellite TV company Sky. Those are the same assets being pursued by Disney, and now with Comcast out of the picture, the programmer could strike a deal for the assets later this week.

“When a set of assets like 21st Century Fox’s becomes available, it’s our responsibility to evaluate if there’s a strategic fit that could benefit our company and our shareholders,” Comcast said in a statement. “That’s what we tried to do and we are no longer engaged in the review of those assets. We never got the level of engagement needed to make a definitive offer.”

With rumors that a major sale of television assets is imminent, 21st Century Fox CEO James Murdoch said it would be wrong to comment on market speculation.

Speaking at the UBS Communications Conference in New York Tuesday (Dec. 5), Murdoch declined an invitation to discuss the asset sales reports, which indicate that Fox would sell assets including its cable networks, movie and TV studios, some of its international business and its regional sports networks to The Walt Disney Co.

Related > Report: Disney, Fox Close in on Deal

“It would be wrong to comment on market speculation,” said Murdoch, citing company policy, "so there’s nothing to add to that.”

But he added that “the way we’re running the business is about value, long-term value.”

Related > Would a Mouse Eat a Fox?

He added that the shape of the business that management was aiming for was “what’s going to create the most value for our shareholders.”

NEW YORK — Broadcast station group stocks, on the rocks over uncertainty around potential deals and deregulation, could be on the rebound, Wells Fargo media analyst Marci Ryvicker said, and the resurgence could spell some bad news for cable operators.

Broadcast stocks had been on a roll late last year, when investors, buoyed by the election of business-friendly President Donald Trump, helped drive shares up 25% to 35% between Nov. 9 and the end of the year. When the benefits of one-party control over the presidency and Congress didn’t come as fast as expected, stock prices suffered.

Since the beginning of the year, shares in publicly traded station groups like Sinclair Broadcast Group, Nexstar Media Group, Tegna and Tribune Media have been relatively flat.

Ryvicker, speaking at the broadcast-centric TVB Forward conference, blamed the sluggishness on disappointment over the lack of movement on the regulatory front and a lack of substantial merger activity.

So far, only Sinclair’s pending $3.9 billion purchase of Tribune has emerged, and it has underwhelmed, she said, partly because of Tribune’s asset mix with several The CW and My Network TV affiliate stations and a small cable network, WGN America. “Wall Street did not like the Tribune stock,” she said. “They didn’t like the assets.”

A finished Sinclair-Tribune deal could help open the M&A floodgates, though, and continued deregulation, especially a relaxing of local ownership rules, should heighten the deal-making, Ryvicker said.

Bigger station groups could give broadcasters more muscle in retrains-mission-consent negotiations with cable operators. Ryvicker said retransmission prospects were not a cause for worry, and relationships between affiliates and their networks are strong.

Broadcast investors also have been spooked by developments outside the industry, particularly declines in pay TV subscribers. Pay TV and broadcast networks are separate industries and have separate issues, but they often trade in tandem, even with radio.

“Investors tend to invest in bundles,” Ryvicker said. “If they are nervous about media as a whole, it’s called a risk-off trade. They start trading everything and anything that is media related.”

Disney sparked jitters two years ago by saying its flagship sports network, ESPN, had shed about 3 million subscribers. That number has risen to between 5 million and 6 million and put pressure on the entire programming sector, not just pay TV networks.

Disney also faced the first test of ESPN’s power on Oct. 1, when its deal with Altice USA systems in the New York area was up for renewal. Altice was expected to reject Disney’s demands for higher rates and broader carriage, and to allow ESPN and Disney’s ABC station in the market to go dark.

Ryvicker sees pay TV erosion continuing, estimating total pay TV subscribers will fall from 97 million in 2016 to 82 million in 2022.

While that could hurt broadcasters, who rely on retransmission-consent revenue from operators to fill their coffers, Ryvicker thinks the slack will be more than taken up by virtual multichannel video programming distributors (vMVPDs) such as Hulu, DirecTV Now and Sling TV, which have begun to include broadcast stations in their offerings. In that same time frame, she estimated, vMVPD subscribers will rise from 1.86 million to 15.9 million.

“Broadcast is in the bundle,” she said, and retransmission-consent revenue will be “totally fine.”

Vimeo, the online video specialist owned by IAC, said it has acquired Livestream and followed with the launch of Vimeo Live, a product that adds live streaming to its platform.

After Livestream is integrated, Vimeo’s platform will enable partners to capture, edit, stream and archive live vents, and host and distribute videos, via a unified workflow, the company said.

Financial terms were not disclosed, but Vimeo said Livestream powers more than 10 million events a year, with nearly 50 million viewers tuning in per month, for clients that include Dow Jones, the Philadelphia Eagles, Tough Mudder and Spotify.

RELATED: Vimeo Drops Plan for Subscription Video Service

The resulting Vimeo Live platform will be capable of OTT live broadcasts in 1080p, and support built-in cloud and adaptive streaming, Vimeo said, adding that archives can be replaced with files in 4K resolution.

Vimeo will also look to support live distribution on several social platforms, including Facebook, YouTube, Twitch and Twitter, and will create a path to enable live content in branded apps across platforms such as iOS, Android, Roku, Amazon Fire TV and Samsung connected TVs.

“Live streaming is the #1 request from our creator community this year, and we’re focused on bringing a new level of quality, convenience and craft to this evolving medium,” Anjali Sud, CEO of Vimeo, said in a statement.

RELATED: Vimeo Appoints Anjali Sud as CEO

Vimeo expects to complete the acquisition of Brooklyn, N.Y.-based Livestream by early Q4 2017. It said Citi acted as exclusive financial advisor to Livestream and Cooley LLP as legal counsel. Williams Mullen acted as legal counsel for IAC.

Comcast has acquired Stringify, an Internet of Things tech startup that helped the cable operator develop xFi, a cloud-based home WiFi management platform that was launched earlier this year.

RELATED: Comcast Tacks On xFi Features

Stringify announced the acquisition via a Sept. 18 blog post, noting that the company would be updating its terms of service soon to signal that Stringify service data will be transitioned to Comcast.

Founded in 2014, Stringify provides a cloud-powered automation service for the IoT, and has introduced apps for iOS and Android. Stringify said it works with 500-plus products and services, including those from Nest (part of Google), Philips Hue, Ring, Amazon Alexa, Honeywell, Insteon and Netgear, among others.

Financial terms of the acquisition were not disclosed. Stringify raised a $6.3 million seed round led by Artis Ventures, according to Crunchbase.

Related: Time to Own the Home

“Comcast is a perfect fit for Stringify,” the IoT provider explained in the blog post. "With xFi and Xfinity Home, Comcast is delivering elegant, powerful IoT and automation experiences to millions of customers. The Comcast team shares our passion for using technology to solve real-world problems, and to connect the world in meaningful ways.”

Elsewhere on the xFi front, Comcast made in investment in Plume, a startup that is helping Comcast develop a lineup of WiFi “pods” that work in tandem with broadband gateways to extend wireless signals to all corners of a consumer’s home.

RELATED: Comcast Leads $37.5M Investment in Plume

In a deal that brings more consolidation to the test and measurement sector, Viavi Solutions acquired Trilithic Inc. on August 9.

Viavi revealed the deal this week as it released fiscal Q4 results, estimating that Trilithic’s trailing 12-month revenue was in the mid-$20 million range. Viavi expects the deal to be accretive in its current fiscal year. This deal comes about five months after Telestream acquired IneoQuest, and nearly a year after Telestream snapped up U.K.-based quality control firm Vidcheck. 

“Their portfolio nicely compliments Viavi’s products and enhances our ability to gain share outside of North America,” Oleg Khaykin, Viavi’s president and CEO, said of Trilithic Tuesday on the company’s earnings call.

He said the deal fits in well with Viavi’s strategy to drive the consolation of field instruments used for test and measurement.

Khaykin likened Viavi’s existing product line as “the bells and whistles” and “highly complex instruments that are used by network [technicians],  while Trilithic tended to focus on the home market and installers.

“So we had a hole in our portfolio in addressing the contractor space,” he said. “With Trilithic,  we are closing that gap and we are now going to go and take share in Latin America, Europe, and Asia…markets where we have not played before. And that's actually a very nice growing segment.”

He also acknowledged that Trilithic holds a much stronger position in the cable network infrastructure sector, and also has a produce line for noise leakage detection, which, he added, “is becoming a major problem for a lot of cable operators as they boost the speeds and they add more services.”

Viavi, Khaykin said, plans to integrate Trilithic into its existing products to create further differentiation.

For Q4, Viavi posted GAAP net revenue of $198.1 million, down from $224.1 million a year earlier, and net income of $12.1 million, or 5 cents per share.

So much for taking a breather.

European telecom giant Altice N.V., just two months after spinning off its U.S. cable operations into a separate publicly traded company, is apparently weighing the possibility of going after the second biggest fish in the domestic pond – Charter Communications.

According to CNBC, Altice N.V. chairman and founder Patrick Drahi is lining up bankers to launch a possible takeover of Charter, the second largest cable company in the country, with 17 million video customers. While there is no guarantee Altice would actually make a formal bid, the company has long coveted Charter assets. It was an early bidder for Time Warner Cable in 2015, a prize that Charter eventually won with a bid of more than $80 billion.

Analysts have estimated that any bid for Charter would have to be north of $500 per share to get the company’s attention. That would value the MSO at more than $200 billion.

Charter stock was priced at $401 per share in early trading Wednesday (Aug. 9), up 3% or $11.25 each. The stock settled down later in the day, up 1.4% ($5.41 each) to $395.06 per share. Altice USA stock, which was down 2.3% (71 cents each) to $30.35 per share early Wednesday, was about even at $30.88 each (down 18 cents) later in the day.

Charter has been the subject of merger talk for weeks, with speculation heavy around possible offers being weighed by SoftBank (parent of No. 4 U.S. wireless company Sprint) and Verizon Communications. Charter has declined comment on all of the merger rumors.

Altice USA spun off as a separate public company on June 22, almost exactly one year after closing its purchase of Cablevision Systems on June 21, 2016. Altice USA stock has performed well – it rose 14% in its first two days of trading to $34.30 per share. The stock has settled down since then, but was still above its $30 per share offering price on Wednesday.

Altice USA and its parent are expected to be aggressive buyers of cable properties in the U.S., but Altice N.V. has said it will concentrate on organic growth for the time being.

However, at its rebranding launch in May, Drahi acknowledged past comments where he said being any lower than third in a market wasn’t worth the trouble. With about 4.9 million residential and business customers, Altice USA is the fourth largest cable operator in the country and the eighth largest telecom provider.

“I said, ‘If we are not No. 1, or No. 2, or No. 3, it’s not very exciting,’” Drahi said. “How do you get there? I really don’t know. Or if I do, I can’t say.”

But he later offered a hint at his blueprint for success in other markets.

“I have always been very clear, that first is fixed [networks], then mobile, then content,” Drahi said. “We started in the U.S. with cable. We are too small in cable to go mobile at the moment. But everything is open. We will see.” 

An investor in SeaChange International submitted a letter to the company’s board of directors urging the multiscreen video technology company to seek a sale while the company remains in a position that would be attractive to potential suitors.

“It should be obvious to the Board that SeaChange's small, sub-$100 million revenue base is insufficient to warrant remaining an independent going-concern,” Roumell Asset Management, explained in a release about the letter. “We have talked to industry participants and believe the demand for SeaChange's assets would provide shareholders a meaningful premium to the company's current share price.”

Selling SeaChange is hardly a new idea. SeaChange has been the subject of M&A rumors for several years. TiVo and Rovi, which merged last fall, were once among those that were poking around SeaChange.

Roumell Asset Management, which says it owns 1.2 million shares of SeaChange or roughly 3.3% of outstanding shares, also shared some harsh words about the company’s “poor operating results and weakening balance sheet” and placed a good portion of the blame at the feet of the SeaChange board.

SeaChange has been asked for comment about the letter.

SeaChange, under new CEO Ed Terino, is in restructuring mode amid a plan to return the company to profitability. As part of that, SeaChange, which counts Liberty Global as its sole 10% or greater revenue contributor, has been cutting back staff and transferring its engineering responsibilities from the Philippines to Poland and pivoting some of its professional services capacity to third parties.

RELATED: SeaChange Pushes Back Restructuring Wrap Up

Terino was named CEO in April 2016 after the board ousted previous CEO, Jay Samit, who orchestrated SeaChange’s troubled $24.5 million acquisition of Timeline Labs, a social media analytics company, in late 2014. SeaChange later discontinued and shut down Timeline Labs.

Roumell Asset Management is also expressing its views after long-time board director Tom Olson, resigned, effective July 18. According to this July 13 SEC filing, Olson, a member of the SeaChange board since 2001 and a past CEO of National Cable Communications, received 13.2 million votes for election, and 16.6 million against.

 That vote, the investment firm suggested, is an indication that “shareholders are finished with the company's ‘business as usual’ culture.”

“We believe the Board needs further reconstitution,” it added. “Candidly, individuals who participated in some of these glaringly inept decisions should consider stepping down. It's clear to any independent observer that new blood is needed in the boardroom.”

SeaChange’s current board includes chairman and former Comcast exec Steve Craddock; Terino; William Markey, president of consulting firm the Relevant C Business Group (RCBG); Mary Cotton, previously CEO of VT iDirect and a former exec with SAP; and Ed Wilson, the co-founder and executive chairman of Timeline Labs, a founding partner at New Form Digital, president and CEO of Dreamcatcher Broadcasting, and a media exec late of Tribune Broadcasting, Fox Television, NBC, CBS and Sony.

Roumell Asset Management had praise for Terino, citing his landslide re-election to the board and his decision to streamline and to build the tech team in Poland, and said SeaChange’s base of customers for Adrenalin (its multiscreen video backoffice platform), relationship with Liberty Global and its equity investment in Layer3 TV “are enviable assets.”

“We believe Mr. Terino's approach of protecting the company's balance sheet by reducing expenses, while focusing on discrete market opportunities, is the correct one and will ultimately position the company for a successful sale,” the investor noted.

Shares in SeaChange dropped 7 cents (2.48%) to $2.75 each Thursday. It has a market cap of about $97.15 million.

Dish Network chairman and CEO Charlie Ergen predicted there will be more merger and acquisition activity in the communications space in the next two years, driven mainly by a favorable regulatory climate.

“I think it’s probably a better regulatory environment today than it has been over the last decade,” Ergen said on a conference call with analysts to discuss Q2 results. “It’s probably a two-year window where there is going to be increased M&A. We’ve already seen it in content industry, I think you’ll see same in the communications industry.”

Ergen wouldn’t comment on where exactly Dish would fit in – he said the satellite service provider is not the biggest player, so it will probably wont be “driving that train.” However, it will at least be a part of the conversation.

Ergen declined to comment about the speculation surrounding one of its former merger targets, wireless carrier Sprint. Dish attempted to buy Sprint in 2013 but was bettered by an offer from Japanese wireless giant Softbank.

Now Softbank is reportedly investigating deals with potential targets ranging from No. 3 wireless carrier T-Mobile and No. 2 cable operator Charter Communications. Charter has said publicly that it is not interested in a deal, but Sprint is reportedly undeterred and has lined up bankers for a possible offer.

Ergen said he does expect cable operators to get more involved in the wireless space, adding that he thought initial moves by Comcast and Charter to activate mobile virtual network operator (MVNO) agreements with Verizon as “smart.” But over time he expects the economics of owning a wireless network will force at least some cable operators to the deal table.

“They are probably going to enter the bsiness sometime in a bigger way,” Ergen said of cable companies and wireless. He added that other entrants are likely to join in the hunt, especially large tech companies that rely on connectivity for their business but don’t control that connectivity.

“At some point in time they are going to start taking out insurance policies to make sure they have a little more control of that,” Ergen said. “You’re going to have some dynamics that change in this industry.”

READ MORE: Comcast, Charter make wireless partnership official

Ergen also sidestepped speculation that Dish and Amazon had talked about possible wireless pairings, but did say Amazon is one of the larger companies that need to think about connectivity.

“The cloud business doesn’t work unless its connected,” Ergen said, as does plans for drone-based deliveries of products. “They also have a big video business now, and that video business a lot of times is watched on mobile devices. You need connectivity for that. I don’t have inside information, but they have to look at connectivity as part of the future.”

Ergen said they could achieve that by either buying an incumbent carrier, or buying or leasing wireless spectrum.

Discovery Communications said it signed a definitive agreement to buy Scripps Networks Interactive for $14.6 billion in cash and stock.

The price equals $90 a share, according to the companies—up 34% from where Scripps Networks was trading before sales rumors started on July 18. Viacom had also expressed interest in buying Scripps Networks, but bowed out of the bidding last week.

The move creates a larger programmer at a time when the industry is consolidating. But the new company still must operate in a challenging environment in which pay TV subscribers are falling and television advertising spending is growing slowly and facing strong competition from digital media.

Related: Analysts: Discovery-Scripps Merger Won’t Solve Problems

Neither company has links to a U.S. broadcaster or major domestic sports rights, so it will remain to be seen how much leverage the combined company will have with distributors.

“This is an exciting new chapter for Discovery," Discovery CEO David Zaslav said in a statement. "Scripps is one of the best run media companies in the world with terrific assets, strong brands and popular talent and formats. Our business is about great storytelling, authentic characters and passionate super fans. We believe that by coming together with Scripps, we will create a stronger, more flexible and more dynamic media company with a global content engine that can be fully optimized and monetized across our combined networks, products and services in every country around the world.”

Related: Discovery, Scripps Report Q2 Earnings

Discovery and Scripps will have nearly 20% share of ad-supported pay-TV audiences in the U.S., the companies said. Additionally, the combination will be home to five of the top pay-TV networks for women and will account for over 20% share of women watching primetime pay-TV in the U.S.