Following last week’s deal between AT&T and Discovery, media analysts are now asking what will be the next big deal in the media industry?
According to Bank of America analyst Jessica Reif Ehrlich, ViacomCBS could be the next big takeover target.
She has upgraded ViacomCBS to buy from underperform, citing the potential for an acquisition.
In a note, Reif Ehrlich said ViacomCBS’s “relatively sub-scale player” status amid the giants dominating the current media ecosystem, and some of its assets — particularly its large content library — could command a premium as content increasingly comes to be the key differentiator for streaming enterprises.
In addition, a merger with a company with greater scale would enhance ViacomCBS’s chances of successfully transitioning to streaming, she said.
Reif Ehrlich added that a potential buyer could be Comcast (owner of both Sky and NBCUniversal). The two companies could “create a powerhouse in film” and also have an “increased footprint” in AVoD demand.
However, any deal would likely lead to a spin-off of CBS due to Comcast’s ownership of NBC.
“Whether Amazon would consider committing to the entirety of ViacomCBS remains unclear, however, Paramount and Viacom’s other content assets (CBS, Showtime, Nickelodeon, etc.) appear largely complementary to Amazon’s strategic streaming priorities,” she added.