This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Viacom, DirecTV and a Corporate Takeover That Makes Sense

Mergers and acquisitions has to become the name of the game in the space. U.S. regulators -- not much else --stand in the way of content owners and network providers making the logical choice by consolidating. That might be an impossible hurdle to overcome.

Precedent, however, does exist. In the United States, the Federal Communications Commission, over the course of the last 15 to 20 years, not only permitted but facilitated and encouraged a massive amount of consolidation in the radio business. It relaxed ownership limits -- with the full support of then President Clinton -- and approved mega-mergers left and right.

These decisions left radio listeners with an inferior, cookie-cutter product dominated by fewer than a handful of companies. Interestingly, the weak regulation rendered broadcast radio irrelevant, relative to new media, particularly Internet radio. Radio companies effectively stopped competing against one another, failing to react, until recently, to new and innovative threats.

There's also precedent in Canada. I have written about it extensively on TheStreet. Rogers Communications (RCI) and BCE (BCE) rule the media and telecommunications spaces in the country.

My article tells much of the story. In a nutshell, Rogers and Bell own the delivery systems (e.g., wireless, cable, satellite), the media outlets (e.g., regional and national networks, including sports) and all or part of Canada's most important sports teams (e.g., Toronto Maple Leafs, Toronto Blue Jays, Toronto Raptors, Montreal Canadiens). While American media and telecom companies could never reach anything that even approaches this size or scale, they should try.

What amounts to a partnership between Rogers and Bell (no matter how much they play up their fierce competition in the media) is quite possibly the biggest story that investors ignore. American media and telecom executives should pay attention and take notes as well.

In terms of size, Viacom ranks in between smaller (and regional) MSG and larger media conglomerate Comcast (CMSA). These three companies need to find a way to hook up, preferably through M&A, but, at the very least, via partnership.

CMCSA Revenue Chart CMCSA Revenue data by YCharts

The Feds would have none of it.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DTV $0.00 0.00%
VIA.B $0.00 0.00%
AAPL $118.43 0.53%
FB $104.09 -1.30%
GOOG $742.51 -1.00%


Chart of I:DJI
DOW 17,747.92 -50.57 -0.28%
S&P 500 2,082.76 -7.35 -0.35%
NASDAQ 5,106.2210 -21.3040 -0.42%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs