Streaming is up; TV is down.
Those contrasting trends were behind the two biggest corporate deals in the media and entertainment space unveiled in 2024: Skydance Media’s coming takeover of Paramount Global and Comcast’s planned spinoff of most of its cable networks.
Warner Bros. Discovery signaled that it, too, would swing into the M&A dance in 2025. The company in December said it would reorganize into two divisions: one comprising its streaming business (plus HBO) and production studios and the other composed of the rest of its cable TV networks.
And the erosion of pay TV was behind an M&A event that didn’t happen — DirecTV’s offer to acquire Dish Network, to gain economies of scale as both try to adapt to new streaming realities. DirecTV scrapped the pact in November after Dish bondholders refused to exchange their existing debt for a discounted rate under the DirecTV terms.
The through line in each case? These are companies “trying to shift their strategic positioning from defense to offense,” says Christopher Vollmer, managing director at MediaLink and partner at parent company UTA. In other words, Hollywood players are looking to strengthen their ability to compete in a streaming-centric world.
In 2025, with the Trump 2.0 administration expected to be friendlier to big mergers than under Biden, the stage is set for more dealmaking. “The overwhelming mood is positive from an M&A perspective,” Vollmer says. “People are looking to kick off M&A activity in the first quarter of 2025.”
WBD chief David Zaslav is clearly eyeing some kind of transaction. The reorg, expected to be complete by midyear, will “create opportunities as we evaluate all avenues to deliver significant shareholder value,” he said — prompting speculation that the company could sell or spin off CNN, TBS, TNT and other nets. Zaslav told analysts on Warner Bros. Discovery’s Q3 earnings call that the new administration “may offer a pace of change and an opportunity for consolidation that may be quite different, that would provide a real positive and accelerated impact on this industry that’s needed.”
For Skydance, headed by David Ellison, the imperative is to scale up Paramount’s streaming biz and boost investment in original content, while slashing costs in the linear TV side of the house. The new owners of Skydance-Paramount could look to sell or spin off some of the TV portfolio.
“The linear TV world, especially the cable world, is a declining business — but it still generates attractive financial results,” says John Harrison, EY Americas growth leader for media and entertainment. “Private equity loves that type of asset.”
Comcast’s hypothesis is that offloading NBCUniversal cable nets including CNBC, MSNBC and USA will let the company focus on growing Peacock and the Universal theme parks. The new “SpinCo” is angling to become a growth vehicle itself, by buying up other properties under the leadership of NBCU boss Mark Lazarus. But it remains to be seen how a company reliant on a shrinking base of TV subscribers can find significant areas of expansion.
Another factor that could spur media deals is the enormous amount of uninvested capital looking for prime investments. Global private equity and venture capital funds held a record $2.62 trillion of total uncommitted capital (referred to as “dry powder” in the industry) as of July 10, according to S&P Global Market Intelligence and Preqin data.
Short of acquisitions, industry observers see another potential scenario that would alter the media landscape: a joint venture between two streaming services. WBD and Comcast have explored a Peacock-Max combo, while Jeff Shell, the ex-NBCU chief who’s set to become president of Skydance-Paramount, said the new company is open to partnerships to create “the ultimate [streaming] bundle.”
“The rationalization of the streaming sector has been telegraphed,” Harrison says. But, he adds, forming such a JV is “a super-complex negotiation, and I think that’s why we haven’t seen that in the U.S. yet.”
Consumers are feeling “subscription fatigue,” topping out at an average of four video streaming services, says Jana Arbanas, principal in Deloitte’s risk and financial advisory practice. A streaming JV, if executed well, could cut churn and maximize return on content spending. There’s a sense of urgency in the industry, she says: “People are looking for results quickly.”
