Verizon Not Looking at Big Media Company Acquisition, CEO Reiterates

Lowell McAdam - H 2015
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Lowell McAdam - H 2015

The telecom giant, which last year closed its acquisition of Yahoo, lost 29,000 pay TV subscribers in the fourth quarter.

Telecom giant Verizon on Tuesday said it lost 29,000 net pay TV subscribers for its Fios video service in the fourth quarter, compared with a net gain of 21,000 in the year-ago period.

Verizon chairman and CEO Lowell McAdam on an earnings calls reiterated that the telecom firm wasn't interested in acquiring a large media or content company. "There is nothing going on right now with us considering any large media play," he said. "Being independent is a very good place for us to play right now." He added that with such recent deals as streaming video agreements for NFL and NBA matches, "we think being a great partner, monetizing through advertising and being independent" is the way to go. 

He did acknowledge that "there is a lot of movement this area right now," but highlighted that "we don’t even now" if rival AT&T's deal for Time Warner "is going to get approved.”

McAdam also acknowledged that Walt Disney's $52.4 billion deal for large parts of 21st Century Fox has been seen as a sign that scale matters. "We look at this," he said, but added that "until all of this shakes out, you can’t really determine" where things will go. 

McAdam had last year also said Verizon was comfortable without buying any big media and content companies. But the company has often been mentioned as a possible buyer, including in the Fox sales process. Asked about how Verizon always gets mentioned as a potential suitor for various media assets, the CEO on Tuesday simply said: "It's nice to be loved."

Verizon said Tuesday that its pay TV subscriber drop in the latest quarter continued to "reflect the shift from traditional linear video to over-the-top offerings." The company ended 2017 with 4.6 million Fios video subscribers. In the third quarter, it had lost 18,000.

Fios competes with cable and satellite TV services. Its broadband service added 47,000 subscribers in the fourth quarter, compared with 68,000 in the fourth quarter of 2016, to end 2017 with 5.9 million.

After its acquisitions of AOL and Yahoo, Verizon last year created a new division, Oath, which encompasses all of its media and advertising businesses. On Tuesday, it reported Oath revenue of $2.2 billion for the fourth quarter, up approximately 10 percent from the third quarter, "driven by increased customer advertising spending during the holidays."

Verizon has been planning a live TV streaming service for a while but said late last year that the over-the-top (OTT) service has been delayed as the company didn't want to launch a "me-too product."

Management on its call touted Verizon's NFL and NBA content distribution partnerships. McAdam in that context said: "We are becoming the first screen for fans of live sports."