CBS, Disney, Fox, and Time Warner are the easy answers — and the ones that many financial types believe are eyeing the independent programming network companies following Comcast’s $45.2B agreement to buy Time Warner Cable. But Bernstein Research’s Todd Juenger takes the conversation a step further today with an intriguing report that suggests several less obvious potential buyers for AMC Networks, Scripps or Starz. Distributors including DirecTV, Dish Network, Charter, AT&T and Verizon might want to take a page from Comcast’s playbook when it bought NBCUniversal. DirecTV doesn’t offer broadband, so it has “additional motivation to take some action to future-proof the business,” possibly by offering exclusive access to certain networks, Juenger says. Charter and Dish are long shots: Charter probably could only afford AMC. And Dish Chairman Charlie Ergen seems intent on acquiring airwave spectrum, although “nobody really knows Mr. Ergen’s potential plans, and they could change.” AT&T and Verizon’s corporate cultures are “a step (or three) further removed from the content business.” Yet here, too, they might take a leap since “their historical core businesses are not exactly growing, and they could amass the financial resources.”
Sony’s another possibility. In the U.S. it “owns a measly one fully distributed cable network” — the Game Show Network. AMC might look especially enticing since Sony produced its hit Breaking Bad and is working on the spinoff Better Call Saul. Could Sony buy AMC, Scripps, and Starz? It would have to take on a lot of debt. But the company said last year, when it rejected a proposal from Third Point’s Daniel Loeb to sell a minority stake in its studio and music assets, that it believes in the future of show business. If that’s the case, then the three acquisitions would “transform Sony to a company with about half of its EBITDA [cash flow] from Entertainment.”
No list of potential buyers would be complete without Silicon Valley giants led by Apple, Google, Microsoft, and Intel. They’ve been unable to license much pay TV content — a problem they could resolve by purchasing the content companies themselves. But here’s the rub: A deal “would cause value destruction on a massive scale” if a tech company bought a programmer to take it outside the lucrative ecosystem of pay TV ads and distributor fees. That might intimidate everybody except Google. The search giant already is building cable-like services with its Google Fiber initiatives and might crave the mother lode of data and ad inventory that would come from owning TV networks. The company couldn’t target ads to audiences as effectively as it can on the web. But at a time when “Internet companies pay $19B for nascent concepts with unproven business models, and nobody blinks (i.e. WhatsApp), the idea of Google paying $7B for AMC is probably not a hard sell.”
Related: Did Facebook Overpay For WhatsApp?
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