MGM leads 2020 media acquisition targets as the entertainment world splits into haves and have-nots - CNBC - Canada News Media
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MGM leads 2020 media acquisition targets as the entertainment world splits into haves and have-nots – CNBC

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Sean Connery, as James Bond.

Bettmann | Getty Images

There is now significant and potentially irreversible inequality in the world of media. If you’re looking for an equalizing force, don’t bet on it happening in 2020.

Two major shifts in the past year have made scale — the concept of being as big as possible — more important than ever for media companies. The first is the transition from linear cable TV to streaming services, which are expensive to build out and run and require premium content to stand out.

The second is major consolidation — Disney buying Fox, Comcast acquiring Sky, AT&T purchasing Time Warner and Viacom merging with CBS — that has put media companies with enterprise valuations under $50 billion at a severe disadvantage to their peers.

The result leaves a handful of companies, including AMC Networks (enterprise value: $5.2 billion), Discovery (~$40 billion), Lions Gate (~$6 billion), MGM (private), Sony Pictures (part of larger company, Sony), and even the merged ViacomCBS (~$25 billion), in positions of relative weakness.

On the other side, Netflix (~$160 billion), Amazon (~$965 billion), Comcast (~$320 billion), AT&T (~$487 billion), Disney (~$315 billion) and Apple (~$1.4 trilion) have all put their flags in the ground in what the media calls The Streaming Wars, an evolution from bundled cable TV to a world of a la carte services that can be watched anywhere on any device. If Comcast, Charter/Time Warner Cable, Dish and DirecTV were the Big 4 of the media distribution world for the past decade, Amazon, Apple, AT&T, Comcast, Disney and Netflix look like the Big 6 of the streaming era.

MGM, in particular, seems like a logical candidate to sell this year. Its owners include Anchorage Capital, Highland Capital and Solus Alternative Asset Management, hedge funds that acquired the company out of bankruptcy in 2010. The funds have made a brilliant decision to sit on their asset for nearly a decade, turning a bankrupt content library into an asset likely worth more than $10 billion, according to people familiar with the matter. And unlike family-owned media companies like AMC (the Dolan family) or ViacomCBS (the Redstone family), the company’s owners are probably less likely to be deterred from selling.

MGM has held preliminary talks with a number of companies, including Apple and Netflix, to gauge their interest in an acquisition, two of the people said. MGM owns the James Bond catalog and its studio has made several current hit shows including “The Handmaid’s Tale,” which streams on Hulu, and “Live PD,” a reality police show that has frequently been the most watched show on cable TV and airs on A&E. It also owns premium cable network Epix. MGM had revenue of more than $1 billion for the first nine months of the year consisting primarily of about $600 million in TV and film licensing revenue and $300 million from Epix subscriptions. For the nine months ended September 30, 2019, MGM reported adjusted earnings before interest, taxes, depreciation and amortization of $123 million.

Representatives for MGM, Apple and Netflix declined to comment.

The ‘arms dealer’ could soon be extinct

The bifurcation of media into haves and have-nots could lead to several outcomes.

The default is smaller companies will simply license their content to the bigger companies’ streaming services. This is the foundation of what built Netflix and Amazon Prime Video.

But the shift to streaming could make the so-called “arms dealer” extinct over time. Disney will want Disney content for its streaming services, AT&T will want WarnerMedia content, NBCUniversal will use NBCUniversal content, and so on.

If that’s where the world is headed, the big streaming services will continue to look for an edge over each other. That’s good news for the little guys, which may see their values spike if they turn into juicy acquisition targets.

Apple, for example, is brand new to media production and distribution and has started Apple TV+ without an existing library of series and movies to entice consumers. Buying an existing studio with experienced media executives may make sense, especially if the company, such as MGM, is heavy on intellectual property and light on people. (Apple is historically averse to corporate integrations that may result in culture clashes.) Apple, of course, also has a balance sheet that dwarfs virtually every other media company and could make a sizable acquisition without betting the company.

Netflix is the only pure play entertainment streaming video company, meaning it will have to churn out content at rates far faster than its competition, which still gets billions of dollars from a declining yet formidable traditional cable TV model with 80 million U.S. households. Buying a studio could help jump start Netflix’s original productions, particularly for time-consuming movies. Netflix has an internal goal to make 95 movies in a year, according to people familiar with the matter. That’s nearly four times what a studio like Universal Pictures makes in a year.

MGM’s studio and library of content, which also includes movies such as “Rocky,” “Mad Max,” and “Hot Tub Time Machine,” would be an appealing add to any company looking to bolster its streaming offerings, including traditional companies like Disney, WarnerMedia and NBCUniversal. But each of those companies is still digesting enormous acquisitions from last year, potentially opening the door for a large, unchallenged bid by one of the big technology companies. If it happens, it would be the first time a big tech company makes a sizable legacy media acquisition.

The catch is that Apple and Netflix have always been averse to big acquisitions. Netflix has never done a material acquisition in the history of the company. Apple’s largest deal ever was a $3 billion purchase of Beats in 2014, an almost laughably small “record deal” given Apple’s size and cash hoard.

Still, things stay the same until they change. Until 2017, Amazon’s biggest deal was online shoe-seller Zappos, which it bought for $1.2 billion in 2009. Then it dropped $13.4 billion on Whole Foods. Just because a company hasn’t made a large acquisition doesn’t mean it won’t.

A third option: bundling

There’s one other option to arms dealer and mass consolidation: bundling.

Smaller players like Starz, Discovery and ViacomCBS could partner with members of the Big 6 to bundle their streaming services together for a discount. WarnerMedia CEO John Stankey said he was open to this idea in a CNBC interview last year, with HBO Max serving as the centralized hub to access not only WarnerMedia content, but also programming from other services.

In this scenario, instead of distributors such as Comcast, Charter, Dish and DirecTV all offering basically the same bundled service, consumers could have choices of bundles among different streaming services. It’s conceivable the Big 6 could each market a different bundle centered around the user experience of their technology. Comcast could have an Xfinity streaming bundle, Apple could have an iOS bundle with Apple Music and Games, Amazon could sell a Prime-based bundle and so on.

Lions Gate CEO Jon Feltheimer alluded to this in his company’s second-quarter earnings call in November.

“Rather than watching our traditional business ratchet down with each new unwinding of the television bundle, we’re embracing the realities of the evolving marketplace, collaborating with our linear partners to grow our respective businesses and transitioning our customers on an innovative and orderly path to an a la carte environment together,” Feltheimer said.

ViacomCBS and Discovery in limbo

It’s possible the Big 6 could turn into a Big 7 if ViacomCBS and Discovery merged their assets. They’re currently too small to effectively compete toe-to-toe against the Big 6, but big enough where both companies feel they can survive in a streaming world.

Viacom, under current ViacomCBS CEO Bob Bakish, was interested in buying Scripps in 2017, but it was ultimately outbid by Discovery. Bringing the companies together would add strength to a global company that has a movie studio (Paramount), live sports (NFL, Premiere League), and non-fiction programming (HGTV, Discovery, Food Network).

Still, the structure of a deal could be challenging, with potential ownership challenges between the Redstones and billionaire John Malone (the largest individual Discovery shareholder) and Discovery dwarfing ViacomCBS in enterprise value but likely acting as the seller. Moreover, Viacom and CBS just merged and are still integrating the companies, which could make a second large deal untenable for a while.

That could lead ViacomCBS and Discovery to either sell or look for smaller acquisitions to build scale, such as Lions Gate’s Starz.

It’s highly unlikely we’ll see the same type of mega-media merger action of 2019 in 2020. Companies will instead focus on marketing their streaming services and bidding on professional sports rights, including the NFL, in the second half of the year.

But the stratification of media has already taken place, and the lines have been drawn. If you’re a media have-not, chances are organic growth, efficient operations and shrewd strategy won’t get you very far. Fortunately for them, there are some very big fish that may finally be hungry enough to bite.

Disclosure: CNBC and NBC are owned by Comcast’s NBCUniversal unit.

WATCH: Liberty Media’s John Malone: Streaming content will eventually thin out

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How media coverage of the opioid crisis has changed over time – Varsity

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YOON-JI KWEON/THE VARSITY

The last decade has seen a steady increase in Canadian media coverage on opioid use. The mounting number of opioid-related deaths — over 9,000 since 2016 alone — has led to the characterization of the issue as a crisis or epidemic.

A 2019 University of Toronto-affiliated study analyzed trends in news reporting related to opioids in Canada from 2000–2017 to understand how the portrayal of the issue has changed in the media over time.

Co-authors Dr. Fiona Webster, a medical sociologist and an associate professor in the Faculty of Health Sciences at Western University; and Dr. Abhimanyu Sud, a physician and an assistant Professor in U of T’s Faculty of Family and Community Medicine, discussed the findings of their research with The Varsity.

“The point is not to demonize or vilify the media, or any particular journal per se, but to look at how the media both creates and reflects back to us what our own social values are, [and] what our own beliefs are,” Webster said.

An evolving narrative

In their analysis of 826 Canadian news articles, the emergence of prominent themes around opioids varied greatly from 2000–2017.

The authors noted a clear departure from discussions dominated by clinical pain care and the promise of opioid treatments in the early 2000s to growing concerns over the highly-addictive nature of the substance and critiques of the pharmaceutical industry at the turn of the decade. Concern over physician prescribing practices and deceit by the pharmaceutical industry were then replaced by an emphasis on the illicit drug market and its adulteration with fentanyl in the latter half of the 2010s.

“We found in our study that pharma’s role in all of this for the most part disappeared from view as the crisis continued,” said Webster. “And we thought that was very interesting, and it is important to tell that story.”

Critical content analysis

To identify the underlying societal values and beliefs that have influenced the definition of the opioid crisis in public discourse, the authors used an approach called ‘critical content analysis.’

This method involves “looking at [opioid coverage] with a view not just to describe what we found, but to think about who benefits from these types of stories, [and] who’s being excluded or marginalized,” explained Webster.

The analysis was in part informed by critical theory and what has been termed the ‘new capitalism,’ especially due to its implications across social life. In the case of opioids, individuals with chronic pain or experience with opioids are often among the most vulnerable members of society, and the consequences of advanced capitalist practices materialize through what Webster describes as “ongoing attacks on social welfare systems.”

“We could see that people were being positioned as criminals… [which feeds] into people’s ideas that we should be reducing social benefits for people, that these types of people are somehow unworthy of our attention and our support as a society.”

This belief is closely tied to that of personal responsibility in health, which has led to the moralization of health issues, such as substance use and dependence. Indeed, a 2017 research study showed that patients with substance use disorder face higher stigma for their condition in society than those with other psychiatric disorders.

“That… neoliberal positioning is related to this idea that people are individually responsible for things like their own health, and that view completely ignores the structural and social inequities that produce health disparities,” said Webster.

Beliefs such as these are especially harmful because they not only reinforce stigma against already-marginalized groups, but also preclude conversations about systemic change.

Defining the scope of the problem

The authors noted frequent use of sensational language to characterize opioid use by Canadian news outlets when tackling the opioid problem.

And yet, defining the scope of the issue itself, along with its origin in particular, was often nebulous. “Is the crisis the drugs? Is the crisis how the drugs are used? [We] need to be specific about the locus of the crisis if we want to actually address it,” said Sud.

The authors also identified repeated efforts to assign blame to particular groups or individuals, such as the government or physicians, as a prominent theme. References to criminality — illegal drug use, drug trafficking, and drug-seeking behaviour — were also found to be a recurrent topic in articles attempting to define the nature of the problem.

Furthermore, their findings showed a tendency for high-risk opioid use to be described as a self-contained phenomenon. This is opposed to academic research, which shows it existing in conjunction with other substance use problems and mental health conditions, as well as socio-structural determinants of health.

When asked about her thoughts on the relative lack of coverage on these underlying factors, Webster cautioned against taking too simplistic of a view, but theorized that “It reflects the values of our society and the fact that we would rather think that these problems are caused by drug cartels and street users.”

Indeed, the opioid crisis does not exist in a vacuum; there are many institutional and systemic forces at play. Webster noted that deep-rooted issues such as racism, classism, and gender bias are all implicated in the rise in overdose-related deaths. However, this nuance is rarely captured in news articles.

A telling example is the relative absence of reporting on the impact of opioids on Indigenous communities in Canada, despite there being extensive evidence of Indigenous people being disproportionately affected. This effect is attributable to a historical social context of intergenerational trauma, colonialism, and racism that has been inflicted onto Indigenous people.

The social construction of the “legitimate” versus “illegitimate” opioid user narrative

The authors sought to draw attention to the ways in which the opioid crisis was being socially constructed, and in particular, the ways in which media reporting distorted reality.

A pervasive narrative theme identified in their analysis was the idea of the legitimate versus illegitimate user. Legitimate users were those who became dependent after being prescribed opioids by a physician.

“They don’t misuse [opioids] or divert them or crush them or sell them, but they use it to treat their pain,” Sud noted of the typical media portrayal. “Most explicitly, they’re no junkie.” They were described as ‘the common person’ — otherwise upstanding citizens who had fallen victim to misfortune. Importantly, legitimate users were those perceived as being worthy of care.

“We call this a critical analysis… because we look at what’s there, but you also look for what’s not there, or… what’s not explicitly constructed versus what’s explicitly constructed,” Sud explained.

“So in constructing this legitimate patient, you construct also the illegitimate patient, the person who’s a junkie, who uses street drugs, who’s not working, who’s not employed, and [who’s] not contributing to larger society,” he continued. “This was one of the most… telling sort of construction, because we see this is in the discourse around solutions and interventions around the opioid crisis, and it creates a lot of problems because it pits people against each other.”

The ‘junkie’ stereotype is neither new nor accurate, and as Webster noted, these individuals are often characterized in “very one-dimensional ways,” which is not only stigmatizing but damaging for families who have lost a loved one to overdose.

And while these categorizations themselves are problematic, Sud explained that they can create even more problems when used as the basis for policy.

This work comes at a critical time, as an unprecedented overdose crisis unfolds in Canada and across North America, and media reporting plays an increasingly influential role in shaping the public’s perception of the issue.

Both Sud and Webster reflected on the need for people to “be careful consumers of media of all forms,” and to think critically about the types of stories being told rather than just accepting them at face value.

Disclosure: Indhu Rammohan is the President of the Canadian Students for Sensible Drug Policy U of T Chapter.

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Athletes, fans take to social media to mourn Kobe Bryant's death – Sportsnet.ca

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The sports world, and the world as a whole, lost a titan on Sunday as NBA legend Kobe Bryant tragically passed away in a helicopter crash at the age of 41.

Fellow NBA players, celebrities and fans took to social media to express their grief.

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Island Voices: Ecological crises deserve better media coverage – Times Colonist

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I was 14 when North Korea invaded South Korea in 1950. As an adolescent, I was more preoccupied with puberty-related personal issues than politics. But when Canada sent military personnel as part of a UN effort, I religiously followed the battle lines. Every day, the local paper’s front page reported how troops were doing, with a map showing enemy and allied movements.

Now we face an even greater challenge, but it’s not always reflected in headlines.

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In October 2018, the Intergovernmental Panel on Climate Change released a terrifying report on humanity’s impact on the chemistry of the atmosphere — the source of air, weather, climate and seasons. Our emissions have increased average global temperatures by at least 1 C since pre-industrial times, causing ice sheets and glaciers to melt, and wildfires, hurricanes, floods and droughts to become more widespread and intense.

At the 2015 Paris climate conference, all nations committed to reduce greenhouse gas emissions so temperatures wouldn’t rise by more than 2 C by 2100. The IPCC report concluded a rise above 1.5 C will cause climate chaos. We’re on a trajectory to reach 3 C or more! The report gave a glimmer of hope that we could escape catastrophic climatic consequences by reducing emissions by 45 per cent by 2030 and completely by 2050.

The IPCC study didn’t garner the same kinds of headlines or urgent stories as the Korean War. Soon after its release, Canada legalized cannabis, which pushed everything else to the media sidelines. The IPCC target of cutting emissions in half within a decade and completely in three decades is a narrow window, with enormous ecological, economic and political repercussions, yet the urgent call to action was a one-day, low-key media event.

Last May, the UN released a major global biodiversity study showing humanity has caused species loss comparable with mega-extinctions in which up to 90 per cent of plants and animals disappeared. It’s not just whales, tigers and penguins that are endangered; insects, the most abundant, diverse and important animals, have been devastated by decades of poisons pumped into air, water and soil.

Now, up to a million plant and animal species are in imminent danger of vanishing. As Earth’s top predator, we depend on nature’s productivity and services — exchanging carbon dioxide with oxygen, filtering water in the hydrologic cycle, creating soil, capturing sunlight, renewing protoplasm, etc. Climate change and large-scale extinction are intimately related consequences of human activity with enormous repercussions for us, yet when Prince Harry and Meghan had a baby last May, media coverage of species extinction disappeared.

Our great evolutionary advantage — intelligence — has served us well. But we’ve become such a powerful presence that our collective impact is driving changes in the physical, chemical and biological properties of the planet on a geological scale — leading some to call this the Anthropocene epoch.

Confronting climate and extinction challenges with the urgency they deserve must dominate our thoughts and priorities. Every day, media report on Dow Jones averages, the S&P index, the value of the loonie, the price of a barrel of oil, the current status of companies such as Google, Amazon, Apple, Exxon and Toyota, and celebrity and sports news.

But what about the real things that matter to us? How many tonnes of pesticides were spread around the globe or plastic into the ocean? How many species have vanished? How many plastic microbeads, hormone mimics and carcinogens have we consumed? How many hectares of land have become desert? How much carbon dioxide have we added to the air? How many tonnes must be reduced to keep temperature from rising above 1.5 C? So many numbers are of far greater importance for our species’ future than stock market values, yet media often ignore them.

We’ve frittered away two of the 12 years we have to halve our greenhouse gas emissions. Where is the daily discussion about concrete ways to reduce them? What about job opportunities acting on ecological crises will create?

It’s said that Nero fiddled while Rome burned. What are we doing while the planet is burning? So blinded by our success as a species, we’re preoccupied by our own amusement, comfort, hyperconsumption, businesses and politics.

We proceed down this path at our peril.

David Suzuki is a scientist, broadcaster, author and co-founder of the David Suzuki Foundation.

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