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Following Donald Trump's reelection as the 47th President of the United States, media companies are closely monitoring potential regulatory changes that could affect merger and acquisition (M&A) prospects within the streaming space.
Warner Bros. Discovery (WBD) CEO David Zaslav expressed optimism about potential industry changes, noting earlier this week that "it's too early to tell, but it may offer a pace of change and an opportunity for consolidation" that could be "positive" and accelerate the industry.
CFRA Director of Global Fundamental Research Ken Leon tells Morning Brief that in the streaming space, legacy TV companies are "trying to catch up to Netflix (NFLX);" however, "it's a really tough battle." He emphasizes that "overshadowing" this dilemma are Big Tech companies increasingly entering the streaming space with their own platforms.
"I don't think you're going to see these mega-mergers of... companies that are declining," he tells Yahoo Finance, adding that "technology has created a very different business model that's hard for some of these companies to catch up."
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Leon suggests that while a second Trump administration's regulatory policies might create a more merger-friendly environment in the space, the likelihood of large enterprises in the streaming sector being bought out or entering major deals is "probably not likely."
While discussing earnings results from Paramount Global (PARA, PARAA) and WBD, Leon looks ahead to the expectations for Disney's (DIS) fiscal fourth quarter; Disney will report earnings on Thursday, November 14.
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This post was written by Angel Smith