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US Watch

US Watch

The Apprentice President

With a new incumbent in the White House, Larry Gerbrandt asks whether a media-savvy President is good for US media.

Along with more than half of US voters, most US media companies are still trying to figure out what a Donald Trump presidency means for them. Given that the smart money was on at least four to eight more years of a Democrat heading up the executive branch, coming to terms with what the marriage of a Republican majority House and Senate to a maverick( some say‘ rogue’) conservative president is a work in progress with more question marks than firm agenda items.

The most obvious fallout has been President Trump’ s promise to dramatically cut and rollback regulations, especially those that cost jobs and hurt business. In theory, that should be a positive for the telecommunications industry in general, though it may mean higher prices for consumers and fatter profit margins for providers.
Historically, Republican administrations have been more lenient on mergers and industry consolidation so it is likely there may be more mergers of big media names, especially those with lots of content. Obvious candidates include Viacom and CBS, along with T-Mobile and Sprint. On the MVPD side, DISH and Cox could be both buyers or sellers. Disney and Comcast / NBCUniversal could be allowed to get larger. Apple, Google, Amazon and Netflix may be able to leverage looser regulations with corporate tax reforms and foreign cash repatriation to make some deals work.
Historically, inflation has been a positive for advertising growth, since ad budgets are often tied to revenue growth, even if it is driven by increasing prices. The US Fed has already indicated multiple interest hikes are in store for 2017 and the Trump Administration is determined to drive the economy and job growth at all costs. This
Administrations first acts were moves to dismantle or dramatically revise a wide range of international trade deals. New deals are likely to incorporate much tougher terms on protecting IP, with China specifically targeted.
So far, Wall Street has liked the prospects, with multiple indexes trading in record
portends improved margins across all media sectors. There are a couple of wild cards. The Republicans ran on a‘ repeal and replace
Obamacare’ platform. Health care and drug companies are among the largest advertisers on TV and print. How health care is ultimately reformed
“ There may be more mergers of big media names, especially those with lots of content.”
territory. The markets are usually looking about six months out, so a sharp and protracted reversal could signify serious doubts about how long the business-friendly administration has to correct course. As a media star and businessman,
will determine how the sector ad spend is impacted. Another involves political advertising. The US Supreme Court unlocked billions of funds for spending on political media in the wake of the controversial‘ Citizen’ s United’ decision.
The Court could revisit the decision but not until the current nominee
President Trump knows how to read financial stats as well as his ratings and retweet counts.
As usual in US politics, the law of unintended consequences is the one that ultimately wins out. Business plans adapt to whatever regulations get put in place or repealed in ways unforeseen by regulators.
for the open Court seat is confirmed. The Citizens United decision allowed corporations to put money into US elections and has led to the creation of enormous‘ political action committee funds’ that have pumped billions of dollars into political advertising.
The impacts aren’ t limited to the US. Among the Trump
Larry
Gerbrandt has been a media analyst and research executive for more than 30 years with companies such as Kagan,
Primedia and Nielsen. Since
2007 he has been principal at
Media Valuation Partners and currently sits on the board of INSP, a basic network with more than 80m subscribers.
He can be contacted at larry @ mediavaluation. com.
What makes the Trump administration so difficult to predict is that it ran on a handful of ideas: Fix healthcare. Reform the immigration process. Renegotiate trade pacts. Rebuild infrastructure and military. Lower personal and corporate taxes and create new jobs.
But Trump didn’ t really run on a Republican Party platform and won, in part, because he was an outsider without legacy baggage. What was presented was a sketch book of ideas that have yet to be finalised much less coloured in.
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