As the focus changes to media, Verizon looks for a mega deal

Written by on April 20, 2017 in Guest Blog with 0 Comments

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Verizon eyes Comcast, Walt Disney or CBS for growth. If anyone needed any more evidence that the traditional telecoms model is breaking down, then look no further. Verizon, the largest U.S. wireless carrier, is seeking new sources of growth as the mobile-phone business matures and its new media ventures take time to gain traction.

Verizon Communications Inc. is considering merger possibilities to reset the course of the company given the fast-changing structure of the industry, and would be open to talks with Comcast Corp., Walt Disney Co. or CBS Corp., said Chief Executive Officer Lowell McAdam.

The company would entertain a deal with Comcast CEO Brian Roberts to roll out that network faster, McAdam said in an interview Tuesday at Bloomberg’s New York headquarters.

“If Brian came knocking on the door, I’d have a discussion with him about it,” McAdam said. “But I’d also tell you there isn’t much that I wouldn’t have a discussion around if somebody came and said ‘Here’s a compelling reason why we ought to put the businesses together.”’

A Verizon mega-deal on the way?

A mega-deal would dramatically reshape the media and telecommunications industry, following AT&T Inc.’s $85.4 billion proposed acquisition of Time Warner Inc. — a deal that would make the phone carrier one of the biggest producers of TV shows and movies in the world.

A major media deal would be a departure for New York-based Verizon, whose acquisition strategy has so far contrasted with that of arch-nemesis AT&T. While the Dallas-based phone carrier snapped up satellite provider DirecTV and agreed to buy Time Warner in transactions valued in the tens of billions of dollars, Verizon has spurned old media and kept its purchases below $5 billion.

“Randall buying into content has made people reevaluate their portfolio,” McAdam said of AT&T CEO Randall Stephenson. “We’re still very excited about Yahoo, bringing them into the fold with AOL. We’re building a lot of millennial-focused content. There are a lot of options out there.”

Verizon’s Yahoo acquisition is expected to close within weeks, and the beleaguered internet pioneer will join AOL under Verizon’s Oath unit. Although Oath will generate billions in annual revenue, it is still a drop in the bucket for Verizon, which earned $126 billion in revenue in 2016. To move the needle, Oath will need bigger hits than go90, the mobile video app Verizon launched in 2015. That app, which recently underwent another overhaul, has yet to gain meaningful traction.

Streamin’ TV still to come

Bloomberg reported just last month that Verizon is expected to introduce a streaming TV option priced similarly to other services ($20 to $40 a month) as soon as this summer, with the hopes of competing with Dish Network’s Sling TV, AT&T’s DirectTV Now, and forthcoming services from YouTube and Hulu. that Verizon.

While the company has made no official announcement. But industry sources say that Verizon’s service would include dozens of channels sold in a package strictly for streaming over the Internet and that it would be completely separate from the company’s existing FiOS TV service. Exact details about pricing, launch date, and which channels might be included with Verizon’s streaming TV option are not known at this point. It’s also unclear if or how the service might be tied in with Verizon’s wireless phone or Internet businesses.

Blessed are the deal-makers

While President Trump, the Deal-Maker-in-Chief is sitting comfy in the White House, the M&A folks are shooting for the stars.  One can only assume they believe ultimate deal maker will ease that the bumpy road to approval.

It is our belief that operators around the world will continue to fill their coffers with content and the more the merrier.  After all, that what the customers want!

More on Bloomberg and Marketwatch

This article was first published on Pricing Data Plans.

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Jonathon Gordon

About the Author

About the Author: Jonathon has been lurking around the Telecoms and Internet space for the last 20 years. He is now a man on a mission – that being the reformation of the Industry Analyst business. He is working with his co-conspirators on transforming the Industry Analyst world forever as an Expert with EMI. .

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