Breakingviews - Collapsed French merger sends bad TV signal - Reuters

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MILAN, Sept 19 (Reuters Breakingviews) - A French attempt to join forces against video streaming giant Netflix (NFLX.O) has fallen flat. “Top Chef” channel M6 (MMTP.PA), controlled by Germany’s RTL (AUDK.LU), and Bouygues-backed (BOUY.PA) rival TF1 (TFFP.PA) announced in May 2021 they were planning a merger. With 3.4 billion euros of combined revenue, the tie-up was meant to create a French TV leader. Yet the companies abandoned the deal on Friday after domestic antitrust rules proved unsurmountable.

The failed merger is a bad signal for European broadcasters. TV players need scale to compete against a growing army of cash-rich U.S. streaming players. Britain’s state-owned Channel 4, which is earmarked for privatisation, may struggle on its own. While European digital advertising, worth $84 billion in 2021, is predicted to grow at 8.6% annually to 2031, the market for TV commercials has stagnated at $31 billion to $32 billion since 2017. If domestic mergers fail, cross-border combinations may be the only option. Italy’s MediaForEurope’s (MFEB.MI) stake-building in German rival ProSiebenSat 1 (PSMGn.DE) may be a prelude to such a move. Such deals don’t usually produce many cost savings. Yet if Europe’s broadcasters can’t team up at home, shopping abroad looks like the only option. (By Lisa Jucca)

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Editing by Peter Thal Larsen and Oliver Taslic

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Breakingviews - Collapsed French merger sends bad TV signal - Reuters
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