Among the many phrases to permeate corporate-speak in recent years is "go big or go home." It's a mantra we are hearing --or more precisely, seeing--a lot with legacy U.S. media companies. It seems to be kicking their appetites for acquisitions into overdrive.
Examples of 'going big' include Disney's $71 billion acquisition of 21st Century Fox; U.K.-based Sky being incorporated into Comcast for $39 billion; and AT&T, a relatively small media player after spending a jaw-dropping $67 billion in 2015 for DirecTV just as millions of households were opting to cut the cord, tripling down, acquiring Time Warner (now WarnerMedia) for $85 billion in 2018.
AT&T's media asset acquisitions have become a very public focus of activist shareholder Elliott Management (which holds $3 billion of AT&T shares). On September 9, Elliott sent AT&T's Board an 8,soo-word, no-holds-barred letter blasting the company for what it alleges are inexcusable strategic and execution missteps, with the DirecTV and Time Warner deals front-and-center (see page 38).
And one cannot overlook possibly the most well-known reconciliation of companies involved in a corporate divorce, with Viacom and CBS returning to the proverbial altar and re-merging. It still remains to be seen if ViacomCBS has the wherewithal to compete against its much larger competitors.
But there's no shortage of once-mighty names that have fallen to become second-tier entertainment companies that are struggling to find dance partners. Many will go the way of companies such as Kodak, Zenith, Packard Bell, Bell & Howell, Compaq Computer, Blockbuster, Bear Stearns, Lehman Brothers, Radio Shack, and dozens of others. The adage 'nothing is forever' should be kept front-of-mind.
The MPAA/MPA was once comprised of Disney, Universal, MGM/UA, Warner Bros., Columbia Pictures, Paramount Pictures, and 20th Century Fox. Today, MGM/UA and Fox have left the building, and Netflix has entered.
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