The mega merger of Scripps and Journal Broadcasting seems to suggest there’s still plenty of money to be made in old media. As Al Tompkins writes at Poynter, “Wall Street loves broadcasting, and bigger companies have more leverage to negotiate retransmission deals with cable companies.”
Scripps becomes the fifth largest independent TV station group in the country, and as Barry Lucas, an analyst at Gabelli & Co., tells Bloomberg “Investors certainly seem to prize the combined companies.”
But here’s the problem: big mergers hide a real weakness: these media companies are getting bigger because they have to. “Leverage” is increasingly a matter of survival, as traditional broadcasters feel that leverage slipping away, into the hands of digital companies.
As Ken Auletta writes in The New Yorker, Rupert Murdoch’s bid to acquire Time Warner signals a company fighting for survival, not a goliath eating up the competition. Murdoch owns traditional media properties in the form of newspapers and the Fox television stations, but that’s hardly the power platform it used to be, especially compared to Comcast swallowing up Time Warner Cable, and A.T.&T. acquiring DirecTV: Read more