What FTC Chair Lina Khan’s exit could do for the media landscape
Donald Trump famously hates the so-called “fake news” media (don’t get him started on CNN). But he could be really good for media stocks. That’s because Lina Khan, the head of the Federal Trade Commission, is likely on her way out as soon as Trump takes office or shortly thereafter.
Whoever replaces her will be much more conducive to allowing big mergers to take place, and there’s no place with more pent-up demand for consolidation than big media.
The FTC as it is known is a consumer protection agency that has the power to bring antitrust cases against companies that price gouge the American public. Khan took that mandate to new and dangerous levels.
When President Biden appointed her in 2021, she was best known as the author of an academic paper “Amazon’s Antitrust Paradox,” which predicted gloom and doom — people will be paying more for stuff they order online, small businesses will disappear and be replaced by Jeff Bezos’s website. That is, unless the online retailer is busted up into a million pieces.
As FTC chair she didn’t break up Amazon, which did not destroy mom and pop business nor raise prices to astronomical levels, but she did scuttle billions of dollars in deal making because she believes big companies are inherently bad.
What she couldn’t grasp is that small companies that can’t compete are bad and usually go out of business or wipe out billions of dollars in shareholder value.
That’s what happened in big media when the market demanded consolidation because of changes in how Americans view news on their phones as opposed to their TVs.
Big media got very small under Khan’s watch. Just look at a stock chart for WBD, the fire sales for Paramount to a boutique studio.
With a new, more free-market FTC chief, you can make the case that WBD stock is pretty cheap as Zas cuts debt and squeezes CNN. It’s ripe for a sale – along with just about every other media company out there.
