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Viacom, DirecTV and a Corporate Takeover That Makes Sense

Comcast is the closest thing the U.S. has to Rogers and Bell. It owns the NHL's Philadelphia Flyers as well as the arena the team plays in. It's a cable company. It provides Internet service. It owns cable networks, including the NBC Sports Network. And, of course, it owns NBC, Telemundo and other broadcast properties.

Meantime, MSG owns a stable of regional sports networks that enjoy considerable national distribution. The company also owns the New York Rangers and New York Knicks, not to mention the Madison Square Garden Arena, Radio City Music Hall and other venues.

And then you have Viacom --- it has a stake in everything movies and cable television, yet it does not have a presence in the one area any major media brand needs to - live sports. A hook-up between these three companies would not be akin to college experimentation. Rather, it would be an aggressive threesome that would not only forever transform the media landscape, but keep the cards in the hands of content owners.

The trio would have to appease Washington bureaucrats as well as the National Hockey League. For the latter, they could just point to Bell's league-approved 37.5% and 18% stakes in the Leafs and Canadiens, respectively, and make adjustments accordingly. For U.S. regulators, they would need to be proactive and play the dog and pony show of spinning a bunch of properties off preemptively.

An old guard member like Viacom must absolutely head in this direction. These three companies just might be able to assemble this sort of powerhouse now, while a reasonable amount of competition still exists in the broad space.

Comcast probably wants to get bigger. Viacom needs to get bigger. And MSG would be the perfect feather in the new company's strengthened cap.

At the time of publication, the author was long BCE and RCI. He is long MSG and VIAB in a custodial account he manages for his minor child.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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