Magazine article Variety

'Fulcrum' Moment for Media

Magazine article Variety

'Fulcrum' Moment for Media

Article excerpt

IT'S HARD FOR LIONTREE CEO Aryeh Bourkoff to sit still these days. During an hourlong interview at his Madison Avenue office, staffers frequently, and discretely, show him notepads with names of clients needing urgent advice from one of the most popular strategists in tech, media and telecom.

"I don't know a single media company today that is not considering a transformative deal," Bourkoff, 45, says. "There's no subsector of media that's so strong, in and of itself, that it doesn't need more scale."

If he's right, and buyers are interested, then that's good for LionTree. The investment and merchant bank Bourkoff created in 2012 became a go-to media dealmaker after it helped Liberty Global buy Virgin Media, Verizon acquire AOL, and Charter Communications take Time Warner Cable. Now it's advising TiVo and is working with Viacom on its negotiations with CBS.

Bourkoff acknowledges that valuations for media companies are unusually high, making him "cautious" about what might happen if inflation or interest rates rise. Yet he believes the deal market will remain strong as companies reassess their roles in an increasingly internet-driven media order. Advisory firm PwC says that media and telecom deals in the first quarter "showed no signs of slowdown after a record-setting 2017" - although, it added, for the first time in years, the market was driven by private equity investors, not megadeals.

Private equity players will stay in the game, the LionTree chief says, despite growing charges by content creators that they too often slash costs and sacrifice quality. In April, The Denver Post published a startling editorial calling on its hedge fund owner to sell the publication to an entity that's "willing to do good journalism."

Bourkoff, however, says that private entities should have a bigger role in media deal-making. The reason: "Companies that are in transition should, by and large, not be public" where they must impress impatient shareholders. He also believes that more splashy megadeals will come, especially as telecom and tech giants warm to the idea of becoming conglomerates, housing several distinct businesses.

Many big media companies ditched that model following the collapse of AOL-Time Warner, which seemed to demonstrate that it's too difficult to corral operations and egos driven by differing agendas. That doesn't seem to worry Amazon, which is expected to spend $5 billion this year on video productions.

"In a lot of ways, it is the new ITT Sheraton," Bourkoff says, referring to the behemoth that, at its height in the 1960s and '70s, owned more than 350 disparate companies, including Sheraton hotels, Avis Rent-a-Car, Hartford Insurance and Wonder Bread. …

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