media merger

A media merger occurs when multiple communication organizations (at least two or more) merge or are acquired. When multiple companies combine, people foresee concerns about declined localism, diversity, and competition. Media mergers cause decreased competition in the media industry, reducing the company’s concern about competitive pricing in many instances. After a merger, some potential disadvantages include increased price points, a lack of understanding of the customer base, and unemployment.

Mergers can help the company work with economies of scale, allowing them to reduce operating costs and expand into new areas. When mergers transpire, the company acquiring the other business(es) often argues that the financial decision will allow them to better plan and allocate finances to benefit the public good.

Therefore, the companies combine to form a new entity. An example of a media merger is the Comcast-NBC Universal merger, which involved Comcast Corp. and NBC combining to form a new company.