Shotgun Wedding: Mergers Seen Avoiding Clash of the Titans

Now that the spat between EchoStar [DISH] and Viacom has been put to rest, questions remain about the status of another tempestuous pairing. Although Charlie Ergen’s company and Turner managed to reach a separate peace at the end of ’03, the agreed-upon extension was meant as a patch to keep the programmer’s nets on the dial as negotiations continued through this year (Cfax 12/31/03). Both sides are mum on the current situation, although EchoStar confirms a final agreement has yet to be written. [The negotiations involve CNN, Boomerang, CNNfn, Headline News, Cartoon, TCM and Turner South.] It appears these sorts of standoffs are likely to continue unless there’s a significant change in the industry’s structure. "I don’t see any grand resolution of this," Precursor analyst Rudy Baca says. "As the competition between content owners and transmission companies continues to ramp up, you’re going to see more and more vertical integration." In other words, Ergen and his counterpart across the boardroom table, Sumner Redstone, may decide the easiest way to keep the peace is through a marriage of their very distinct assets. "Putting them together would be like an ‘American Gladiators’ steel cage match, but it makes good business sense," Baca says. That goes double for Comcast/Disney, a match Precursor deems "inevitable." "It won’t happen overnight, but it will happen," Baca says. "Just give it time."