The media industry closes out 2024 in a landscape very different than a year ago and perhaps looking up as the biggest players begin to manage the confounding decline of linear television. Paramount Global’s sale to Skydance Media, followed by Comcast‘s spin-off of its cable networks into a new company, both still to close, are transformational.
Silver Lake taking Endeavor private, Sony Pictures Entertainment buying the Alamo Drafthouse theater chain, and Disney investing $1.5 billion for an equity stake in Epic Games, are notable. NFL owners voted to let institutional investors buy minority stakes in teams. Omnicom is acquiring Interpublic, reshaping the advertising landscape. International highlights include Mediawan’s acquisition of Leonine Studios.
No one anticipates another storied studio will change hands in 2025. What Wall Streeters and industry players do expect is movement around media’s “free radicals” — a chemistry term for unstable atoms that Liberty Media founder John Malone applied to the industry years ago. That’s Lionsgate Studios and Starz, which are splitting into stand-alone companies, and AMC Networks. Streaming partnerships will accelerate. Cable networks will consolidate.
Comcast fired the starting gun last month with plans to spin off most of NBCUniversal’s cable networks (USA Network, CNBC, MSNBC, Oxygen, E!, Syfy and Golf Channel) with digital assets like Fandango and Rotten Tomatoes into a new company known for now as SpinCo with $7 billion in annual revenue to “play offense in a changing media landscape,” according to Comcast president Mike Cavanagh. SpinCo is seen as a buyer of other networks. “We see a real opportunity to invest and build additional scale,” said NBCU’s Mark Lazarus, incoming CEO of the new entity.
Days later, Warner Bros Discovery announced a corporate restructuring under two new operating divisions, Global Linear Networks and Streaming & Studios. That’s seen as a first step towards actual separation of the businesses and WBD cited increased “optionality to pursue further value creation opportunities for both divisions in an evolving media landscape.” The company is seen is as a seller of cable networks.
“The explicit separation” of networks from streaming and studios mirrors Comcast’s recent spinoff announcement, said Doug Creutz of TD Cowen, noting WBD’s emphasis on strategic flexibility and shareholder value creation. The new structure “could facilitate various scenarios, from a full spinoff of the linear networks to a potential combination with other media assets.”
Private equity, emboldened by lower interest rates, might be a buyer of cable assets at the right price. “This is the classic type of business for private equity. A business that throws off strong free cash flow. That’s not growing. You can do some mergers, take cost out of it, and generate nice free cash flow,” says Alan Gould of Loop Media. While it’s not clear if or how cable consolidation will play out, the stocks have moved higher because it’s movement, it opens possibilities, and it feel for the first time like there’s the outline of a plan. Overall, “linear declines are being managed better”, says David Joyce of Seaport Global. He applauded WBD’s recent distribution deals with Comcast and Charter on terms that did not crush TNT for losing the NBA as Wall Street had feared, and even credited the two distributors with “stepping up to support the overall industry.” Cleaning house, WBD reported a massive write-down of its linear networks in the second quarter after losing that longtime NBA rights deal. Paramount also took a huge one-time charge to write down value of its linear business ahead of the sale to Skydance. That deal announced in June is conceptually huge, a smaller player buying a legacy Hollywood studio and television network, promising a new convergence of tech and media in concert with software giant Oracle, which is co-founded and run by Ellison’s father Larry Ellison, Skydance’s biggest investor. The $8 billion transaction will see Skydance with RedBird Capital buy out Shari Redstone’s controlling stake in Paramount, which will continue as a public company. he deal is expected to close in the first half of 2025. Mixed Signals For Deals That said, incoming FCC chairman Brendan Carr indicated that regulators will be giving Skydance-Paramount a closer look. Donald Trump happens to be suing CBS over how 60 Minutes handled an interview with Kamala Harris, and, generally, the president elect does not enjoy the news media. Has threatened to revoke broadcast licenses and jail journalists and just won a $15 million settlement from ABC. Legal targets also include the board of the Pulitzer Prize, publisher Simon & Schuster and the Des Moines Register. “I’m doing this not because I want to. I’m doing this because I feel I have an obligation to,” Trump said at a recent press conference. There are legal constraints as to what the FCC can and can’t do but also a question of just how much big media will benefit from a more lenient deal climate and the deregulation expected from the incoming administration.“We do note that Trump’s first administration (unsuccessfully) opposed” CNN parent Time Warner’s sale to AT&T, says TD Cowen’s Creutz. “More recently incoming FCC chairman Brendan Carr made comments suggesting that the perception of bias at CBS could impact their review of the impending Paramount-
