MEDIA MERGERS AVOID PITFALLS

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In the heady and expansive 1980s, media deals-like most deals at the time-were done because money was available, handsome fees were there to be made, and companies wanted to be bigger than the other guy.

Now, as shown by our 100 Leading Media Companies Special Report in this issue and by the latest news reports, merger & acquisition activity is building to just this side of a fever pitch once again. Thankfully, for different reasons.

The over-promised and under-delivered information superhighway is stoking lots of deals. After the Tele-Communications Inc./Bell Atlantic merger fell apart, media companies and the Baby Bells have been less ambitious in their entanglements; still nobody wants to be left behind on the learning curve. There's a tremendous amount of experimentation going on, as media companies enter into alliances and take positions in high-tech companies.

Not all will be successful, of course. But other more-solid deals are being made among traditional media. The New York Times Co. bought The Boston Globe (which it knows how to manage) and sold its women's magazines (which it doesn't). VNU has taken a major stake in the U.S. trade paper market with the acquisition of BPI and Bill Communications. TCI, not to be deterred, has come back by structuring a deal to merge its cable and programming operation with Viacom, settle a big antitrust suit, and put Viacom's Madison Square Garden sports combination in TCI's Liberty Media.

The new entities thus far have shown a rational premise that fits neatly into their strategic plans for the future. The deals, after all, involve savvy media companies getting together with other smart media companies, not straying off into blue-sky diversification schemes.

So, while it may appear to be a feeding frenzy that has spread to the media world, what we really have, at the heart of the flurry and fuss, are deals based on all the right reasons.

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