WASHINGTON (CNS) — Mergers and consolidations marked 2018 in the media world.
The Walt Disney Co. and Comcast NBC Universal fought a furious battle to win control of most of 21st Century Fox. Disney won, with a bid of $71 billion, although it will have to divest the 20-plus regional sports networks owned by Fox, because combining those with Disney-owned ESPN would give Disney a monopolistic stranglehold on live sports.
One of the buzzworthy entrants in picking up those pieces is Amazon.com, which has traded places this year with Microsoft and Apple as being the United States’ most valuable company. Amazon is already in the entertainment business with its Amazon Prime offerings, which include content from Amazon Studios.
The Disney takeover becomes official Jan. 1. Fox is keeping its broadcast network, and its news, business and national sports cable channels in the deal.
Comcast licked its wounds by buying 75 percent of British broadcaster Sky Broadcasting for $39 billion, outbidding a soon-to-be-trimmer Fox for the lucrative stake.
AT&T, which used to be just a telephone company, took control of Time Warner, which included DirecTV, the nation’s largest satellite television provider, in the summer after a judge denied a federal government request to reject the merger. Within days of acquiring Time Water — for $108 billion, including assuming Time Warner’s debt — AT&T started integrating DirecTV into its other assets. And DirecTV has started offering its own content to join the original-programming crowd.
What used to be jokingly referred to as “the 500-channel universe” can be more accurately described as “the 500-original-series universe” as content — and the ability to control content — have become king.
If streaming is the next big thing, consider: Fox and Comcast are partners in Hulu. Disney is expected to unveil its own streaming service in 2019. CBS has been dipping its corporate toe in the streaming waters. And Netflix paid a reported $100 million just for one more year of streaming rights to the 1994-2004 sitcom “Friends,” which is owned by AT&T thanks to Warner Bros. being part of the Time Warner acquisition.
As of 2018, Forbes magazine ranked Comcast, Disney, AT&T, CBS Corp. and Viacom in descending order of revenue.
Fox is getting smaller because of a lack of a clear succession plan with Fox mogul Rupert Murdoch having turned 87 in 2018. The same could be true at National Amusements, which owns both CBS and Viacom.
Sumner Redstone, 95, has long been in frail health. His daughter, Shari, had been making noise about combining CBS and Viacom’s assets with the idea of selling off different parts. But she found an antagonist in then-CBS chief Les Moonves, who stymied her at most every turn until he was forced out in September — not by a pro-Redstone board but by sexual abuse allegations from a dozen women that could put his $120 million golden parachute in jeopardy pending an ongoing review by the company of Moonves’ actions during his tenure at CBS, which dates back to 1995.
A 2012 article in Business Insider said that in 1983, 90 percent of the U.S. media was controlled by 50 companies; as of 2011, 90 percent was controlled by just six companies. By 2017, the number had shrunk to five. Next year’s number could well be even smaller.
One of the most talked-about mergers was one that didn’t happen. Sinclair Broadcasting had been angling to purchase the television holdings of Tribune Co., and was willing to pay $3.9 billion for the stations. When the Federal Communications Commission made a rules change in how TV markets are counted, it seemed to pave the way for the transaction.
However, media activists complained Sinclair, with its overtly political commentary and its “must run” editorials on the 193 stations it already owns or operates, would have had too much power in the marketplace. The deal would have given Sinclair the greatest coverage of American TV households, even after it sold some of the acquisitions to other buyers. But the FCC said Sinclair wasn’t exactly on the up-and-up when it turned out that many of the would-be purchasers of those extraneous pieces already had ties to Sinclair.
The deal was scotched and, instead, Tribune announced Dec. 3 it was selling to Nexstar, another local-TV behemoth. The sale makes Nexstar the largest single owner of TV stations in the country. And Nexstar is coughing up $6.4 billion for the privilege — at 61 percent premium over the Sinclair bid.
Not every newsmaking item about the communications industry has to do with mergers.
In October, a Georgetown University Law School conference looked at life in the 20 years since the Children’s Online Privacy and Protection Act was signed into law. One panel looked at enforcement issues, but there wasn’t that much to look at, as the Federal Trade Commission has issued only 24 complaints since the bill became law.
However, on Dec. 4, the attorney general’s office for the state of New York announced the largest-ever COPPA-related fine: $4.95 million against Oath, a Verizon subsidiary created once Verizon, another used-to-be-just-a-phone company, bought America Online and Yahoo! and merged their operations.
The attorney general’s office found AOL had conducted auctions for ad space on hundreds of websites the company knew were directed to children under the age of 13. Through these auctions, AOL collected, used and disclosed personal information from the websites’ users in violation of COPPA, enabling advertisers to track and serve targeted ads to young children. Under the terms of the fine, Oath agreed to adopt comprehensive reforms to protect children from improper tracking.
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