Donald Trump famously hates the so-called “fake news” media (don’t get him began on CNN). However he may very well be actually good for media shares. That’s as a result of Lina Khan, the pinnacle of the Federal Commerce Fee, is probably going on her method out as quickly as Trump takes workplace or shortly thereafter.
Whoever replaces her might be way more conducive to permitting huge mergers to happen, and there’s no place with extra pent-up demand for consolidation than huge media.
The FTC as it’s recognized is a shopper safety company that has the facility to convey antitrust circumstances towards firms that value gouge the American public. Khan took that mandate to new and harmful ranges.
When President Biden appointed her in 2021, she was greatest often called the writer of a tutorial paper “Amazon’s Antitrust Paradox,” which predicted gloom and doom — folks might be paying extra for stuff they order on-line, small companies will disappear and get replaced by Jeff Bezos’s web site. That’s, until the net retailer is busted up into 1,000,000 items.
As FTC chair she didn’t break up Amazon, which didn’t destroy mother and pop enterprise nor increase costs to astronomical ranges, however she did scuttle billions of {dollars} in deal making as a result of she believes huge firms are inherently unhealthy.
What she couldn’t grasp is that small firms that may’t compete are unhealthy and often exit of enterprise or wipe out billions of {dollars} in shareholder worth.
That’s what occurred in huge media when the market demanded consolidation due to adjustments in how Individuals view information on their telephones versus their TVs.
Massive media acquired very small below Khan’s watch. Simply take a look at a inventory chart for WBD, the hearth gross sales for Paramount to a boutique studio.
With a brand new, extra free-market FTC chief, you may make the case that WBD inventory is fairly low-cost as Zas cuts debt and squeezes CNN. It’s ripe for a sale – together with nearly each different media firm on the market.
