I know a lot of you come here for straightforward, unbiased advice on what to do with your next $66 billion so here’s my angle on the Comcast Disney offer: they’re on drugs. Executives in big media firms are addicted to the buzz of the epic deal. Do we not have enough case studies of failed mega media mergers? More to the point, what’s the success rate of mergers that produce vertically-integrated media giants? Sony and Columbia, AOL and Time Warner, Time Warner and Turner, Vivendi and Universal (and dozens of smaller but equally ill-starred deals) were all sold to shareholders on the promise of producing new value by hooking together content and distribution.
None created appreciable value – in fact, most destroyed truckloads of shareholders’ money in short order – some of these deals have turned healthy businesses into basket cases. The fact that the engineers of these deals continue to produce the same discredited justifications – Comcast CEO Brian Roberts says: “There is no doubt these two companies can achieve things together that neither is able to do on their own” – says more about the irresistible glamour of the really big deals than about their commercial logic.