M&A in media: An environment ripe for dealmaking

We expect media consolidation to rebound in 2025, driven by reduced regulatory scrutiny and lower capital costs

Each year, we evaluate the dealmaking landscape in the media industry, and this year's outlook is significantly more optimistic than last. Easing interest rates are expected to improve financing availability compared to the past two years, making M&A more feasible. Additionally, consumer purchasing power is stabilizing, which increases the attractiveness of B2C media assets to prospective buyers, creating a more favorable environment for deal activity.

We also anticipate a shift in the regulatory landscape under the incoming U.S. administration. For instance, during Trump’s first term, Disney acquired 21st Century Fox for $71.3 billion in a transaction many believe would not have succeeded under the Biden administration. In contrast, under Biden, the Federal Trade Commission (FTC) blocked the much smaller $2.2 billion sale of Simon & Schuster to Penguin Random House. These factors collectively set the stage for a more dynamic year in media M&A. 

Improved conditions for dealmaking are likely to drive traditional media companies to divest underperforming assets. When coupled with fresh capital and a revitalized strategy, these carve-outs can unlock value and drive growth for both sellers and buyers. 

The private equity solution for traditional TV

Traditional TV networks face significant challenges as their value continues declining despite generating substantial cash flow. With streaming services from companies like Disney, Warner Bros. Discovery (WBD), and Paramount Global reporting profitability, these companies are considering how to handle their legacy TV assets. One potential solution is to partner with private equity firms to extract value from these declining assets. 

An example of how such assets can be repositioned through strategic dealmaking is TPG’s acquisition of DirecTV. In 2021, AT&T sold a 30% stake in DirecTV to TPG, which helped slow the business’s decline and generate significant dividends for both TPG and AT&T. TPG demonstrated that the company could benefit from operating independently, free from the constraints of a corporate parent. This success led TPG to acquire the remaining 70% stake in September 2024, underscoring its confidence in the model. 

Major media companies like Disney, Comcast, WBD, and Paramount Global will likely adopt this strategy. In fact, as we prepared to publish this report, Comcast announced the spinoff of its cable channels including MSNBC and CNBC, positioning the assets for acquisition. We predict that in 2025 at least one other such deal from a major network will be announced. By collaborating with private equity firms, large media companies can offload their declining TV networks, allowing these firms to manage and potentially enhance their profitability. These partnerships help media companies clean up their balance sheets and offer private equity firms a lucrative opportunity for substantial returns. TPG's success with DirecTV highlights the potential benefits of this approach, and we expect this trend to gain momentum, especially in a new regulatory environment that may support such transactions.