Media moguls are talking about changing current priorities, frugality in uncertain times
Despite tough economic conditions, the door to a deal is still open when billionaire executives like Liberty Global CEO Mike Fries look for advantageous opportunities at this year’s Allen & Co. Sun Valley Media Conference. Fries is focused on “growing and performing” across Liberty Global – which oversees the business in the mobile, broadband and media content sectors – while financial storm clouds gather on the industry horizon.
Of course, it helps that Liberty has $ 4 billion in cash that provides some much-needed flexibility to maneuver in uncertain times.
“We are always open on the M&A front as both buyers and sellers if it makes sense,” Fries told CNBC. “Most of our efforts go to the markets we are in. So in the UK, for example, we are the largest mobile company, we are the most important broadband company I think. There may be opportunities in that market to continue to rationalize whether it is fiber, content or solid. “
What can you expect when media moguls head to the Sun Valley in the midst of epic tumult and opportunity
Fries also reads the tea leaves when it comes to the entertainment industry, where many expect further consolidation after years of media proliferation and power expansion. Wall Street’s pendulum swings towards the Netflix model and an increased scrutiny of content budgets makes Hollywood look over their shoulder.
“I think so,” Fries said when asked if he expects further consolidation in the near future. “I think you can see some content resources, not necessarily ours or with us or by us. But studios have inherent value, and since Netflix or others seem to stay local, we own the interest in ITV and All3Media, so we have some studio assets that can be interesting. ”
Who knows – maybe we can all look back on this year’s Sun Valley conference as the hub for the industry’s next dramatic upheaval.
“I feel like it’s coming to a point where people are going to stop adding subscriptions and companies could possibly put down some of their subscriptions,” a national media buyer told TheWrap. “There are too many over-the-top services out there.”
Here are some more takeaways from the first days of billionaire summer camp.
David Zaslav wants quality, not quantity
In an economically motivated move, HBO Max stopped production in selected European countries earlier this week, when the newly established parent company Warner Bros. Discovery is looking at $ 3 billion in cost savings. Maybe we should not be surprised given WBD chief David Zaslav’s comments on Tuesday in Sun Valley.
When discussing the current “turmoil” in the industry, Zaslav admitted that it creates “many opportunities”, but he did not sound like a man who was prepared to expand the company’s programming portfolio.
“Warner Bros. Discovery has great, high-quality content,” he told Variety. “So I think the world has changed. And it’s not about how much, it’s about how good. So we’m pretty excited about our new company and seeing everyone in these beautiful surroundings. It’s going to be a lot of fun. . “
Inside David Zaslav’s overhaul of Warner Bros. Movie Division | Analysis
Zaslav has already moved to pull many of WBD’s basic cable channels, such as TBS and TNT, out of script content. And while the company spends about $ 33 billion on content this year, management has said it does not want to win the “consumer wars.”
This feeling is expected to expand to WBD’s streaming efforts with Discovery + and HBO Max which will be merged into one service at some point in the future. “We will talk about how to do it and when, soon,” teased Zaslav.
Media is creeping back to linear TV
As media companies reoriented around streaming in recent years to chase the elusive Netflix stock price, linear TV became the forgotten children of the entertainment industry. Rejected and rejected as a declining business despite billions in quarterly revenue, pay-TV has suddenly made a roaring comeback as Wall Street’s confidence in the power model disappears.
As such, we should perhaps not be too shocked that Disney boss Bob Chapek has apparently turned his back on the desire to spin by ESPN, according to Puck News. Disney did not immediately respond to TheWrap’s request for comment.
Live sports remain the calling card for making money on traditional television, and ESPN boasts a bundle of games. But even if the proven revenues from linear TV offer a lifeline to media companies that have gone all-in on streaming, a looming recession complicates matters.
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“Brands that usually pull their ads during a recession are the ones who often have a harder time coming back,” said the national media buyer. “Brands that stay the course, even if they are at low levels in a time when power is tight, tend to excel because they stay out in the market and build awareness and build the brand trait.”
Advertisers often rein in marketing money in tough economic times, which has a trickle-down effect across the entertainment field. The sports economy was hit hard during the first year of the pandemic, with additional revenues drying up and TV ratings plummeting. Should America go into a new recession, the side effects will resonate throughout Hollywood, and it will not just be a Disney-ESPN problem.
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