There are three different media mergers or takeovers happening right now that could seismically upset the existing media ecosystem to a greater or lesser extent. These are:
- The battle for Warner Brothers Discovery between Netflix and Paramount Skydance
- Sky’s bid for ITV
- Daily Mail and General Trust’s bid for The Telegraph
While each of these three is different, in scale, and importance, whether they go ahead seems to me to rest on how you define the markets they operate in, and more importantly, how the regulators define those markets.
Warner Brothers Discovery – Netflix or Paramount Skydance
Warner Brothers Discovery (WBD) has become the subject of a bidding war since Paramount Skydance made a preemptive bid for the company back in September. A series of further offers was put to WBD, and in turn, the board decided to officially put itself on the block. The company had previously decided to split itself into two parts:
- The studios side with its movie and television production business, its library and its streaming service HBO Max
- The TV channels business including CNN, TNT, Discovery and others.
The general feeling is the first part is the future of the business, while the second is, to put it politely, a “legacy” business that is going to become less valuable over time.
Paramount Skydance’s offer was for both parts of the business, while Netflix is only interested in the studio and streaming business.
Last week, the WBD board decided Netflix’s offer was the preferred option, even though Paramount Skydance offered more money in cash – the difference between the two offers coming down to the value of those cable channels. (To be clear, the cable channels are still profitable, but these are declining assets – with fewer people subscribing to cable/satellite bundles which provide much of these channels’ revenues via both distribution fees and advertising).
Paramount has since hit back, making an unsolicited offer direct to shareholders. I wouldn’t be surprised if an “improved” offer is also made.
So who is going to prevail?
That really depends who you ask, but I think it’s regulators who will really get involved here. Of course in the US, there is now all manner of political interference in this process. A lot of industry watchers will note when the Ellisons (behind Paramount Skydance) or Ted Sarandos (Netflix) get to meet with Trump.
But I think we need to look wider than that.
Netflix taking over the WBD studio business probably isn’t a monopoly concern, with lots of production companies out there, although it does mean taking over a “major” studio that currently releases a lot of movies in cinemas. But while the industry is rightly concerned that there would be one fewer place to take a project or do hiring, I think the bigger regulatory concern is the number one streamer taking over the number three streamer. While HBO Max hasn’t yet launched in the UK (March is now the date when we might finally get to see The Pitt), it has launched in a lot of places, and it has an incredible library of films and television. It has a very sizeable number of subscribers and there are still other markets it has yet to launch in beyond just the UK.
The competition authorities will surely be thinking about that scale. The question is how do you size the market?
Do you just compare Netflix with HBO Max, Prime Video, Disney+ and other streamers?
Or should you add YouTube, Instagram and TikTok to the cumulative market? They’re all seeking video advertising after all?
And you probably need to add in linear TV too.
Depending on how you size the market, a combined Netflix + HBO Max might be a serious monopoly concern, or relatively small in the overall size of the “video advertising” sector.
Regulators can be very tough. Remember when Facebook (Meta) bought Giphy, the GIF library? The UK Competitions and Markets Authority decided that it was a monopoly, and even though the sale had gone through, Facebook was forced to divest itself of the business because of the UK regulator. And that was a tiny transaction in the scheme of things.
The US regulatory scene might be quite “political,” but the UK and EU regulators will also be taking very close looks, and they might be quite intransigent and prevent a deal going through.
The cable channels bit would still be up for sale of course, and it’s entirely possible that the cable channels part of Comcast (owners of NBC and Sky) might bid for that to put alongside its own split of cable channels business. Comcast was another potential bidder in the WBD sale process who didn’t make the final endgame.
Does that mean Paramount Skydance would have an easier time? Paramount+ certainly isn’t as market dominant in streaming as Netflix is, so there might be fewer issues there. But there would be substantial job losses as Paramount and Warners start sharing a lot of infrastructure. The offer terms basically spell this out. The industry still loses one place to pitch a project, and this time there might be a news issue too.
Pararmount Skydance wants the whole enchilada – both parts of the business that WBD has been splitting up. That means they end up with both CBS News and CNN. Setting aside the interesting changes that CBS News has been going through with a new Editor in Chief who’s never worked in television being put in position because they’re seen as onside politically, you could easily see that savings would be made across both News divisions. The CBS Evening News might just be rebranded as ‘CNN on CBS’ or something.
Somehow, I suspect that the competition regulators might have an easier time of things with Paramount Skydance swallowing WBD. It still takes “out” a studio, but the monopoly case might be harder to make.
But it feels likely that this will take years to fully play out.
Sky – ITV
Meanwhile, in the UK media marketplace there are still “preliminary” discussions that ITV has been having with Sky for the latter to acquire its channels business for £1.6bn (Compare this with the $100bn+ that Paramount Skydance is now offering for WBD!)
This would mean that the Comcast-owned Sky would acquire ITV1, ITV2, ITV3 and ITV4 amongst others, as well as the streaming platform ITVX. It would not include ITV Studios which makes many of the programmes shown by the channel as well as a myriad of ITV Studios owned production companies.
But as with the WBD acquisition above, there are questions over regulatory approval.
ITV Media and Sky Media are by far the two largest sales houses for television in the UK. ITV Media sells all its own in-house channels and ITVX. Sky Media sells all its own Sky channels, plus Channel 5/Paramount in the UK, TNT, Discovery and from next year when it launches in the UK, HBO Max.
Outside of these two are 4Sales who sell Channel 4’s channels and platforms, Disney Advertising and a handful of others.
But it would seem that ITV Media and Sky Media combined would have a dominant share of the UK TV market. The counter argument to this is that the pair are competing with Alphabet’s YouTube, Meta’s Instagram and TikTok for video advertising. And of course Netflix and Prime Video amongst other streamers, have also built up sizeable ad businesses.
Let’s consider the consumer side of things. First there’s what the channels would be called: who knows how a Sky owned ITV would brand itself?
There’s probably a strength in having free-to-air ITV branded offerings alongside pay Sky-branded offerings. But Sky already has a lot of brands – with its streaming sub-brand, NOW also muddying the waters. It’s not hard to imagine that ITVX and Sky’s streaming offerings would somehow merge. And Sky would use ITV to upsell its paid offerings – perhaps showing some Sky-branded Premier League football to tempt potential subscribers across. Would more of ITV’s linear schedules be filled with Sky re-runs and vice versa?
But what about ITV Studios which would continue separately?
A significant majority of what ITV currently broadcasts is made by ITV Studios. You would imagine that any acquisition deal would include the ongoing rights to existing “ITV Shows”. A newly independent ITV Studios wouldn’t be able to shop Coronation Street or I’m A Celebrity… to, say, Channel 5. But new “ITV Studios” shows might end up anywhere. They already make lots of shows for the BBC. Perhaps a new Ant and Dec gameshow wouldn’t automatically end up with ITV, and might be shopped to the market?
Meanwhile, with both Sky News and ITN within a combined group, it seems likely that there would be some rationalisation. ITN is only 40% owned by ITV, but you wouldn’t expect a Sky owned company to not want to use it’s own news brand. Some kind of merger would seem likely – news being very expensive. Of note is the fact that Sky News’ funding is only guaranteed by Comcast until 2028. Beyond that is uncertainty anyway, so a combined Sky/ITN would reduce costs.
Unquestionably there would be massive job losses across Sky and ITV since there would be significant duplication between the two channels. Both companies have had rounds of redundancies in recent years, and these would ramp up as such a deal went through.
The thing I’m not clear about at the moment is what Comcast’s overall strategy is. In the US, as referenced above, Comcast is currently splitting up its “legacy” cable channels from its broadcast and streaming offerings. Channels like MS NOW (formerly MSNBC), CNBC, USA and SyFy are going into a new company called Versant Media. These are largely cable assets which as mentioned above, are seen as declining properties.
The shift away from the cable bundle (even with streaming equivalents like YouTube TV in the US, doing the same thing), has meant that streaming is the future.
Meanwhile Comcast is retaining NBCUniversal – the NBC network which still reaches large audiences through an increased reliance on sport like Sunday Night Football, a new NBA package starting this season and the Olympics. It also keeps one cable channel, Bravo, full of “Housewives” programming that also does well in a streaming environment. And it keeps Peacock, its US-only streaming service.
The latter is a weak link in its offering, and it simply doesn’t have the international reach that all its competitors have. There was a half-hearted attempt to launch it in the UK, but it disappeared after briefly being a tile buried within Sky’s streaming offering.
Then there was the sale of Sky Germany, Austria and Switzerland to RTL. That just leaves Sky Italy within the Comcast family.
So what’s the global play? They have a strong US brand in NBC, and a weaker one in Peacock. They have a potential pair of very strong brands in the UK – ITV and Sky, and a middling brand in Italy.
You would think that they need a single global brand that perhaps encompasses linear broadcast with its power to reach large audiences (think of the Euros or World Cup, or even the audience for BBC1’s Celebrity Traitors), and the more profitable pay-TV which is becoming increasingly a streaming only business. When do Sky and NOW merge brands? Do ITV and Sky merge brands? What happens internationally?
It’s also worth noting that Comcast makes significant revenues from its broadband services, and its notable that Sky has a significant broadband and telecom division too. They don’t break out revenues from the rest of Direct-to-Consumer, but you have to think that it’s strong. In the UK, Sky is probably second only to BT.
But it’ll be UK regulators as well as ITV’s shareholders who decide the fate of this bid.
DMGT – The Telegraph
The final media acquisition that seems to be in play at the moment is that of The Telegraph. The newspaper group has been owned by a variety of colourful characters over recent times. The Barclay brothers owned it until relatively recently, but following one of the brothers’ death there were debt issues, and Lloyds Bank ended up owning the group. They promptly sold the asset to Redbird IMI which was a joint venture between Redbird Capital Partners and International Media Investments (essentially an arm of the UAE state).
Because of the UAE money, the UK passed a law that effectively banned overseas ownership of newspapers, forcing Redbird IMI to sell. The view was that Redbird IMI had overpaid, but now they wanted to get their money back.
Now forced to sell, they first had a bidder in Dovid Efune, owner of the New York Sun, but he couldn’t come up with the necessary funding.
Then there was Redbird Capital itself, one of the two original partners in Redbird IMI essentially buying out the other partner. But that bid collapsed under all kinds of accusations about the source of Redbird’s money again, and the influence of China.
Which brings us to the Daily Mail and General Trust (DMGT) who have entered a period of exclusivity to buy the remaining Telegraph assets (The Spectator magazine was sold separately). This would obviously bring together, The Daily Mail, The Mail on Sunday, The Daily Telegraph and The Sunday Telegraph under one roof. Beyond that, DGMT also owns the i paper, Metro and even the New Scientist. DMGT also owns 20% of ITN – everything in media is linked somehow.
DMGT would own a sizeable part of the UK newspaper landscape, and that would seem to bring regulatory concerns.
But in 2025, the argument against stopping the takeover is that newspapers have a dwindling scale and influence in UK society. While they’ve all transitioned to being digital media news companies, the competitor set for news is now much wider than “newspapers.” Back in 1981 when Rupert Murdoch bought The Times and The Sunday Times, having already bought The Sun and The News of the World, he had to jump through a lot of hoops to get the sale through.
I suspect the takeover won’t be so straightforward though, because even with a diminished number of newspaper sales, the industry is still considered very important, and influential, by government. (I’m firmly of the belief that this is an outmoded view. Ask the average thirty-something what “paper” they read.)
A combined DGMT newspaper ownership would make it the biggest newspaper publisher in the country, but exactly how big isn’t clear because many newspapers have stopped publishing ABC sales figures in recent years. Yet at the same time, the number of papers being sold has diminished enormously.
There would be lots of savings to be made in a combined group, with ad sales, finance, technology and so on likely to be combined. If DGMT was to follow Reach, it would even see large parts of editorial being shared across titles: why send a Mail and a Telegraph correspondent to the same football match? Readers might complain a bit – Express and Mirror readers are very different politically, and yet a growing amount of output is shared – but that’ll be for the new owners to consider.
The Daily Mail is the biggest selling paper in the UK and is very profitable. And The Daily Telegraph is also profitable. Indeed, its the print products that bring in most of the revenue, while digital still struggles. So mess with those print products at your peril. But the printed paper is going the same way as those cable and linear TV channels mentioned above. The question is how they can transition those businesses to continue growth in the longer term.
There is one common thread between these three media mergers – a consolidation of news.
Were Paramount Skydance to win WBD, then there would likely be a combined CNN and CBS News. If Netflix wins, then Comcast is a possible bidder for the cable channels business, potentially bringing CNN and Sky News under the same overall ownership. It also has NBC News, MSNOW and CNBC, although the latter two are in Versant.
If Sky buys ITV’s channels business, then Sky News and ITN likely become one entity.
If Comcast ends ups with both CNN and ITN as well as Sky News and NBC News, we would see international TV news diversity shrink enormously.
And with DGMT buying The Telegraph, we would have a singular right-leaning newspaper empire in the UK.
Then again, the future of news certainly isn’t printed newspapers, and it’s probably not 24 hour TV news channels. But it might be regulated as such in the short term. And it’ll be regulators that really sign off on these deals.