As the seismic M&A contest in the US between Comcast and Disney creeps closer to its conclusion, and another one involving Sky in the UK rumbles on, many analysts and investors are again focusing on the intersection, or integration, of major media and telecoms assets on both sides of the Atlantic.
AT&T’s successful purchase of Time Warner was the most notable recent example of so-called "vertical integration", the combination of a distribution behemoth with a content Goliath. And though the US Department of Justice promised a few weeks ago to appeal a judicial ruling earlier this year that permitted that $85 billion mega-merger to proceed, a preponderance of legal experts say the judge’s earlier approval will likely stand.
And as other industry players prepared to embark on another round of consolidation that is now gathering steam, they awaited the outcome of the US government’s initial legal challenge with unalloyed interest.
Last month, shareholders at Disney and Twenty First Century Fox approved Disney’s $71.3bn acquisition of Fox’s international entertainment assets. A little earlier Comcast CEO Brian Roberts had conceded the price tag for those media properties was too high for him to continue with his rival bid, and rather graciously called off his firm’s pursuit. (Disclosure: CNBC, my employer, is a wholly owned subsidiary of Comcast). The Murdoch family had reportedly preferred the stock element of Disney’s offer, with the added benefit that US authorities had already granted conditional anti-trust approval for the deal.
Disney has a current market capitalisation of close to $168bn, and from the outset the company was clear about its rationale for splashing out for Fox’s movie and TV production house, its US cable channels and indeed its Asian content powerhouse Star India. The ultimate prize is competitive scale and superior content for the coming war over internet streaming.
And the 39 per cent of Sky that Fox owns could also prove useful to Disney, since the UK-based firm possesses some enviable content including much sought-after rights to screen England’s Premier League football.
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Read more:
UK TV broadcaster Sky's earnings surge
Comcast tops Murdoch offer by boosting Sky bid to $34bn
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Sky would also provide some cutting-edge distribution technology that will improve the platform offering of whoever ends up as its successful suitor; and represents a diversification opportunity outside the United States with sizeable subscriber bases in Germany and Italy. Disney/Fox has less than weeks to launch another bid for Sky that will outstrip’s Comcast’s latest offer. Otherwise Sky shareholders may be minded to sell to Comcast, subject as ever to regulatory approval.
Last month I heard a contrarian position on the benefits of such vertical integration (anyone remember the ill-fated AOL-Time Warner?) from Amos Genish, the CEO of Telecom Italia. His firm has partnered with, and competed against, Sky several times in the past decade. “I don't think that the payback is as clear as people are claiming,” he told me at his Rome headquarters.
He insisted instead that a telecoms giant (Telecom Italia is a top 10 company in one of the world’s top 10 economies) should focus on what it knows best, distribution through its networks, but also take “calculated, careful steps” to pick and choose the best content for its customer base.
That selection process is as crucial as ever for media giants - like Disney - that make billion-dollar bets on film franchises and TV shows. As the company prepares to roll out its own streaming service next year, and perhaps to take majority control of Hulu once the Fox acquisition closes, it is gearing up to face ever tougher competition from Amazon and Netflix.
I appreciate that this fact is far from a fresh insight. But one analyst I spoke to recently highlighted an intriguing possibility. He talked about a future inflection point of peak “eyeball hours” - the greatest number of hours in a day that the average person can physically find time to watch content on a screen, multiplied by the total population worldwide with access to such screens.
Once we reach that moment, he explained, every single content provider and distributor would be caught in a death match for survival, in a marketplace that will no longer continue to expand in lock-step with technological innovation and internet penetration. It is conceivable that one day everyone on Earth could have access to an affordable viewing device, fast mobile internet and a reliable power source.
Then in the absence of growing frontier markets - content providers and distributors would be forced to defend their margins as they fight for slices of a global pie that is no longer getting bigger. Some corporate leaders clearly think it's better to begin with a big slice.
Willem Marx is a reporter for CNBC International. The National and CNBC International are global content sharing partners
Oppenheimer
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2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Lewis Hamilton in 2018
Australia 2nd; Bahrain 3rd; China 4th; Azerbaijan 1st; Spain 1st; Monaco 3rd; Canada 5th; France 1st; Austria DNF; Britain 2nd; Germany 1st; Hungary 1st; Belgium 2nd; Italy 1st; Singapore 1st; Russia 1st; Japan 1st; United States 3rd; Mexico 4th
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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Brief scores:
Day 2
England: 277 & 19-0
West Indies: 154
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Villains
Queens of the Stone Age
Matador
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
