Investing.com — While there are expectations of mergers and acquisitions (M&A) in the U.S. media industry in 2025, Barclays (LON:BARC) analysts suggest that only a few strategic transactions may truly make sense.
Despite high hopes, the bank says structural challenges in the sector could worsen, limiting the effectiveness of M&A as a solution.
Barclays points out that while M&A speculation has been ongoing, tangible deals remain rare.
“There are few permutations that actually result in real synergies or help longer-term viability,” the analysts note.
The bank highlights one potential deal that could involve a combination of NBCUniversal and Warner Bros. Discovery (NASDAQ:WBD), with a subsequent spin-off of cable network assets.
However, the bank feels that priorities such as Comcast (NASDAQ:CMCSA)’s focus on its broadband business could sideline significant media transactions.
Furthermore, Barclays says an alternative to large-scale M&A could be the formation of joint ventures between streaming platforms to share costs and reduce subscriber acquisition costs.
Barclays highlights existing collaborations like the Comcast and Paramount joint venture in Europe and Disney (NYSE:DIS)’s integration of Hulu Live and Fubo into a separate entity as steps in this direction. Such partnerships could lead to bundled streaming offerings or a reduction in the number of streaming services.
Additionally, regulatory changes may introduce new risks for media companies, according to the bank.
Incoming FCC (BME:FCC) Chair Brendan Carr’s aggressive stance and potential actions by President Trump, such as revoking broadcast licenses, are seen to potentially create operational challenges.
They explain that the developments may put indirect pressure on networks to avoid disputes with local affiliates, potentially affecting revenue growth.
Overall, while M&A could provide a pathway for some media companies, the analysts suggest that regulatory hurdles, shifting priorities, and the need for strategic alignment will likely complicate the landscape in 2025.
