These are the six best Euro­pean me­dia tar­gets af­ter Sky deal

Gulf Times Business - - BUSINESS / LEISURE -

Com­cast Corp’s $39bn takeover of satel­lite TV com­pany Sky Plc shows how much US me­dia com­pa­nies are pre­pared to pay for Euro­pean as­sets that help them com­pete with stream­ing gi­ant Net­flix Inc.

That’s got bankers and an­a­lysts won­der­ing who will get swal­lowed next in the hunt for orig­i­nal con­tent and new au­di­ences.

Walt Dis­ney Co could be on the prowl af­ter los­ing a bid­ding war for Sky. Dis­ney is start­ing a stream­ing ser­vice to ri­val Net­flix next year and would ben­e­fit from more Euro­pean shows and movies.

Dis­cov­ery Com­mu­ni­ca­tions Inc is an­other po­ten­tial buyer and John Mal­one’s cable TV gi­ant Lib­erty Global Plc will have spare cash af­ter sell­ing its Ger­man and East­ern Euro­pean units to Voda­fone Group Plc. Even Net­flix and stream­ing ri­val Ama­zon.com Inc could get in on the game, us­ing M&A to gain lo­cal expertise and stop the best con­tent go­ing to other plat­forms, said OC&C Strat­egy Con­sul­tants se­nior ad­viser Mary Ann Hal­ford.

Sky is rare in be­ing a pan-Euro­pean broad­caster. Most of the in­dus­try is a patch­work of com­pa­nies mak­ing lo­callan­guage shows for na­tional au­di­ences, so it would take more than one takeover to build a player with in­ter­na­tional clout.

Cul­tural sen­si­tiv­i­ties are also at play. Gov­ern­ments may block takeovers by US me­dia gi­ants for fear they would harm the unique va­ri­ety of Europe’s film and TV scene.

Here are some pos­si­ble takeover tar­gets. The com­pa­nies de­clined to dis­cuss their M&A prospects, or could not be reached for com­ment:

ITV: Bri­tain’s big­gest free-to-air com­mer­cial broad­caster has a mass- mar­ket ad­ver­tis­ing busi­ness and a pro­duc­tion unit that made hit shows such as ‘Body­guard’ and ‘Love Is­land’. Lib­erty Global has a 9.9% stake in ITV and has been men­tioned as a po­ten­tial bid­der. ITV is very UK-fo­cused, leav­ing any buyer exposed to the risks around Brexit, said John Enser, a me­dia lawyer at CMS Cameron McKenna Nabarro Ol­swang in Lon­don.

Canal+: Vivendi SA’s pay-TV chan­nel is a gate­way to the euro area’s sec­ond-big­gest econ­omy. With about 8mn sub­scribers in France, Canal+ “def­i­nitely has to be com­ing up on peo­ple’s radars,” said Ke­pler Cheuvreux an­a­lyst Conor O’Shea. Sky is ab­sent from France so Com­cast may see Canal+ as a way in. Cost cut­ting at Canal+ sug­gests Vivendi may be dress­ing it up for sale, O’Shea said. Yet pol­i­tics could be an ob­sta­cle — Canal+ is the big­gest in­vestor in the French film in­dus­try and a sym­bol of France’s “cul­tural ex­cep­tion.”

En­de­mol Shine: En­de­mol Shine tran­scends na­tional bor­ders with hit TV fran­chises such as “Big Brother” and “MasterChef”, which are sold to broad­cast­ers who then pro­duce them for na­tional au­di­ences. The com­pany is up for sale and is said to be draw­ing in­ter­est from Hol­ly­wood tal­ent agency En­deavor and France’s Bani­jay Group SAS.

Me­di­aset: Italy’s largest com­mer­cial broad­caster Me­di­aset SpA has been on the look­out for a cross­bor­der deal to com­bat the com­pet­i­tive threat from Net­flix and Ama­zon’s Prime Video. Its fu­ture out­side Italy has been un­clear since a part­ner­ship with Vivendi col­lapsed in ac­ri­mony in 2016. It has been los­ing pay-TV cus­tomers since its founder, former Ital­ian Prime Min­is­ter Sil­vio Ber­lus­coni, de­cided to cut spend­ing on sports broad­cast rights.

ProSiebenSat.1: Ger­many’s sec­ond-big­gest pri­vate broad­caster has lost al­most a quar­ter of its mar­ket value this year. New CEO Max Conze is step­ping up spend­ing on shows and plot­ting an “all-out dig­i­tal at­tack” to de­fend a cus­tomer base of 45mn house­holds in Ger­many, Aus­tria and Switzer­land. It gen­er­ates more than a bil­lion on­line video views a month and owns a stu­dio that makes shows in­clud­ing drama “Bosch” for Ama­zon. Unlike its ri­val, Ber­tels­mann SE’s RTL Group SA, ProSiebenSat.1 has no con­trol­ling share­holder to block a takeover at­tempt.

Nordic En­ter­tain­ment Group: Set to be spun off from Swe­den’s Modern Times Group AB in the first quar­ter of next year, Nordic En­ter­tain­ment Group AB has ex­clu­sive rights to broad­cast con­tent such as English Premier League soccer and For­mula 1 rac­ing. Kin­nevik AB’s dis­tri­bu­tion of its MTG stake leaves Nordic En­ter­tain­ment Group with­out a large con­trol­ling stake­holder, and there­fore more easy to ac­quire.

An en­trance to The Walt Dis­ney Stu­dios, which is the in­ter­na­tional head­quar­ters for the me­dia gi­ant The Walt Dis­ney Com­pany in Bur­bank, Cal­i­for­nia (file). Dis­ney is start­ing a stream­ing ser­vice to ri­val Net­flix next year and would ben­e­fit from more Euro­pean shows and movies.

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