Media & Entertainment

Telecom Italia’s new boss needs some quick wins

18 January 2019

The Italian telco’s shares have dived after a profit warning. New CEO Luigi Gubitosi can stop the rot by listing its fixed network, but that path is slow and uncertain. A quicker route to credibility lies in selling stakes in choice assets like Inwit and the Brazil business.

Netflix reaps the dividends of its dominance

15 January 2019

The video streaming service is raising the cost of subscriptions just as AT&T, Disney and NBC ready rival offerings. Hiking prices in the face of growing competition could turn off viewers. Yet Reed Hastings’ firm is so far ahead of peers he can afford to take the risk.

Gannett’s dilemma is picking lesser of two evils

14 January 2019

A rival publisher wants to buy the USA Today owner for $1.6 bln. Gannett has repeatedly sliced costs and staff, to the detriment of news. MNG’s script is more of the same – and cuts are likely to be deep to justify a 23 pct premium. The public interest probably loses either way.

M&A defence is least of new BT CEO’s worries

7 January 2019

Major shareholder Deutsche Telekom is free to lift its stake in the UK telco from the end of January. But takeover chat seems premature. Broadband price regulation and Brexit are more pressing concerns for new boss Philip Jansen, and probably make a bid unlikely for a few years.

Superapps will starve the rest in Southeast Asia

2 January 2019

Cash is being lavished on giants, Grab and Go-Jek, which dabble in everything from ride-hailing to groceries. It’s a Chinese approach to snaring online consumers. As investors follow SoftBank and Tencent’s seal, the gap will widen between these “do it all” outfits and the rest.

A plucky local upstart will take on Macau’s moguls

31 December 2018

Regulators in the world’s largest gambling hub could allow new players onto the casino floor when licenses expire in 2020. With frayed U.S.-China relations dealing American giants Sands and Wynn a weak hand, homegrown names like Suncity and Golden Dragon will try their luck.

A Trump versus Xi wrestling match might just help

26 December 2018

Maybe not a real one. But Tencent could tag-team with WWE to build Chinese versions of Triple H and The Undertaker, and vent a bit of trade tension. The $370 bln tech giant would make a burly partner; Tencent would score a PR coup, plus Trump access via co-founder Linda McMahon.

Overleveraged AT&T is a magnet for activists

26 December 2018

Boss Randall Stephenson has piled on over $180 bln of debt to add entertainment to the U.S. telco’s core business. It’s a risky strategy, and any missteps could make AT&T look a bit like fallen icon General Electric. Breakingviews imagines a missive from a restive shareholder.

Sony’s turnaround will be an activist casting call

21 December 2018

Boss Kenichiro Yoshida has boosted earnings at the $61 bln movies-to-video-games group. But he needs to shed a loss-making handset unit and spin off the chip business, among other things. The Japanese company's reluctance to act will see hedge funds make a cameo in Sony's remake.

Ethical investing is cherry on private equity cake

18 December 2018

Bridgepoint is bidding $1 billion for Swedish gaming firm Cherry. The buyout group’s scope to pay a big premium and still get a good deal is due to public markets’ aversion to “sin stocks”. Ethical investing is supposed to improve behaviour, not private equity coffers.

Tencent and Spotify are streaming’s dueling banjos

12 December 2018

Tencent Music’s IPO valued it at the same $23 bln as its Swedish rival, even though the Chinese service is profitable and Spotify is not. Their business models are worlds apart, but as one moves into video and the other builds up subscriptions they will sound increasingly alike.

Vincent Bolloré will break up Vivendi

12 December 2018

The 66-year-old tycoon is smarting from a drubbing by Elliott in Italy, and his media group suffers from a huge conglomerate discount. A partial sale of Universal Music may help. But dismantling the whole group would release $10 bln in value, and keep potential activists at bay.

WPP’s new investor pitch contains too much hot air

11 December 2018

CEO Mark Read wants to slash costs and get the $13 bln ad group growing in line with rivals by the end of 2021. That’s the right idea. But his growth plan looks heavier on jargon than detail, while cuts are modest. Overall it’s less convincing than one of WPP’s whizzy campaigns.

Telecom Italia stuck in activist feedback loop

11 December 2018

Top investor Vivendi wants to overhaul the Italian telco’s board months after a coup by rival Elliott. Regaining control looks hard and Elliott would remain a thorn in the French group’s side. Unless the two find common ground, a governance discount will weight on TIM shares.

AT&T fails to grasp the true value of “Friends”

5 December 2018

It may let Netflix keep the TV show for around $100 mln, more than triple the price last time round. Given AT&T plans to launch its own video service, depriving a rival of a blockbuster could have been smarter. Maybe Time Warner’s new owner isn’t cut out for the media shark-tank

Tencent Music strains to hit Spotify’s high notes

4 December 2018

China's gaming titan is floating its music-streaming arm at a valuation of up to $24.5 bln. Sales are up, and the unit has a novel, profitable business model. Still, its paying listener base is less than a third of its Swedish peer’s, making the huge premium hard to justify.

Tribune gets better M&A script in second season

3 December 2018

Nexstar is buying the U.S. media group for $4.1 bln. Tribune recently pulled out of an earlier deal after suitor Sinclair irked U.S. regulators. This go-around looks like a stronger plot. The price is higher, the buyer’s record is strong and there’s a clean sheet with watchdogs.

Altice wins most from $2 bln fibre sale

30 November 2018

Patrick Drahi’s debt-ridden telco needs cash to keep building fast broadband in quiet bits of France. Investors like Allianz will pay up for infrastructure-like assets. Selling a minority stake lets Altice lock in high valuations, while offloading some of the risk if fibre flops.

MTN’s $8 bln Nigeria spat requires Goldilocks fix

26 November 2018

The African phone giant is close to ending a row with the West African nation over dividends. A face-saving deal will repair ties in its biggest market. After protesting its innocence, a reported $800 mln settlement looks excessive. But too little will keep MTN in Abuja’s sights.

French telco fight will become ménage à trois

22 November 2018

Three tycoons and state-backed Orange are bleeding each other dry in a mobile price war that shareholders despise and consumers love. Something must give in 2019. A deal of some kind between Iliad and Bouygues makes sense, if billionaire owners can set aside their egos.