This report does not constitute a rating action.

After President Trump’ won the election last November, S&P Global Ratings made assumptions about what the policies of the new administration could be and how those policies could affect the U.S. media and telecommunications industries. Five months into the administration, we look back at our initial assumptions and revise them based on the statements and actions of the administration.

Behind The Scenes: Broader Tariffs Could Have Secondary Effects On U.S. Media And Telecom Sectors

Initial assumption

Materially higher tariffs and intensifying trade tensions between the U.S. and its major trading partners were key areas of focus heading into 2025, though we didn’t expect any direct tariffs on the media and telecom sectors.

Revised assumption

Thus far the administration’s announced tariffs apply to goods rather than services and therefore do not directly affect the U.S. media and telecom sectors, notwithstanding President Trump’s social media post about 100% tariffs on films made outside the U.S. (for a detailed discussion of that proposal and the impact on the U.S. film industry, see "U.S. Film And Television Brief: Will 100% Tariffs On Movies Made Outside The U.S. Hurt Hollywood?", published May 19, 2025). However, U.S. media and entertainment companies are still exposed to potential secondary effects because the tariffs, and related economic softness, could erode consumer spending and thus lead advertisers to scale back their advertising plans. Telecom companies, by contrast, offer broadband and wireless telecom services, which are more recession resilient. They could face higher costs for equipment manufactured outside the U.S., although we believe most network equipment and all optical fiber is manufactured domestically. The telecom companies may choose to counter these higher costs by tempering plans for wireline network buildout. This may negatively affect subscriber and revenue growth over the long term. We note the Trump Administration announced it will temporarily exempt smartphones and other electronics from its tariffs on China.

As part of its response to the proposed 145% U.S. tariffs (which are currently on pause pending further negotiations), China announced it could further limit the number of U.S.-made films that it allows to be shown in China (currently the Chinese government allows 34 U.S. films per year). If this were implemented, we believe the impact on the U.S. media companies would be relatively small. Since the pandemic, China has become a much smaller part of Hollywood’s global film strategy as the Chinese government and populous have focused on domestic films. We estimate Chinese gross box office receipts for U.S. films were only around $600 million last year, about 5% of overall box office receipts in China. Further reducing the overall impact to U.S. studios, the studios only receive 25% of that (unlike in the U.S. where the box office split is generally 50%/50% with the theaters). There could be additional pressure on U.S. media companies if there is backlash by international consumers against American-owned content, leading to reduced demand for movies, streaming services, or theme parks; however, this is not in our base case.

We believe the domestic theme parks owned by Walt Disney Co. and Comcast Corp. would be hurt by an economic slowdown. These theme parks, especially the flagship parks in Orlando, Florida, are dependent on out-of-state visitors and could experience lower attendance and weaker per cap spending if the economy continues to weaken. Some airlines are already reporting weakening demand for transatlantic routes from European travelers. This is a bigger problem for Disney since about half of operating income come from its domestic parks and experiences businesses, whereas Comcast’s theme parks represented just 8% of overall EBITDA in 2024.

Crossed Wires: U.S. Administration Won’t Relax Biden-Era Rules, Holding Back M&A

Initial assumption

The Trump administration will remove Biden administration guidelines on M&A, which would lead to the approval of more industry mergers and acquisitions (M&A).

Revised assumption

We now believe the U.S. administration is likely to closely scrutinize large media, telecom, and tech M&A activity. Therefore, the prospects for material M&A in these sectors in 2025 are less likely. The head of the U.S. Department of Justice’s (DoJ) antitrust division, Gail Slater, shares the Biden Administration’s views on curtailing the power of big tech companies. In addition, the heads of the Federal Trade Commission (FTC) and DoJ have said they plan to retain the Biden administration’s M&A guidelines which we believe places requirements that make it difficult to get federal approval of potential transactions. The Trump administration’s view will be tested by Charter Communication’s announced acquisition of Cox Communications and Alphabet Inc.’s announced agreement to acquire Wiz Inc., a cyber security company. In addition, the Trump administration has continued to pursue antitrust lawsuits against both Alphabet and Meta Platforms Inc.

Earlier this year, the FCC Chairman, Brendan Carr, commented that the FCC will consider not just the merits of any transaction that the agency reviews but will also evaluate the companies’ diversity, equity, and inclusion (DEI) policies and practices. The FCC has already initiated investigations into the DEI policies of Comcast, Verizon Communications Inc., and Walt Disney. The FCC also has several large media and telecom deals on its review docket, including the merger between Paramount Global and Skydance (the FCC’s informal 180-day timeline was reached on May 14, 2025), as well as Verizon's acquisition of Frontier Communications Holdings LLC (the FCC approved Verizon’s transaction on May 16). We are uncertain how the Trump administration will affect the regulatory review for any large deals. This is especially true for any potential deals that involve media companies and national news organizations.

Step Into The Spotlight: TV Broadcasters May Be The M&A Exception

Initial assumption

The Trump Administration will relax ownership rules, which will encourage local broadcast TV consolidation.

Revised assumption

Our assumption is unchanged because we believe the administration remains inclined to approve broadcast M&A. This includes both in-market consolidation, which would increase the number of duopolies, and national consolidation (though material consolidation would likely require changing the current 39% national ownership cap). Many potential buyers, however, are constrained by the poor state of their balance sheets and the low value of their equity; they may not have access to debt at attractive interest rates and may not want to issue equity to fund these deals. In addition, some are constrained by the FCC’s own ownership rules, though the FCC may try to address this.

In-market consolidation: The FCC can consider these transactions on a case-by-case basis following the Supreme Court’s 2021 ruling in favor of the FCC to relax certain media ownership rules, including the ability to own more than one top-four rated TV station in a single market. This could potentially include acquiring stations under current joint sales agreements (JSAs), shared services agreements (SSAs), or local marketing agreements (LMAs), or companies could swap stations with other TV broadcasters. In February, the FCC approved the first combination of top-four rated TV stations in more than five years when it granted a waiver to Gray Media Inc. to acquire KXLT-TV (a FOX affiliate) in Rochester, Minn., where Gray already owns a NBC-affiliated station. However, this waiver was granted based on the grounds that KXLT-TV qualified as a failing station (audience share and financial performance has been struggling for an extended time).

National consolidation: Current broadcast TV ownership rules limit any one company from controlling stations that cover more than 39% of the U.S. population (stations operating in the ultra-high frequency (UHF) spectrum band are counted at 50% of the station’s population coverage). A few station groups, including E.W. Scripps Co., have grandfather wavers and many large TV station groups are at, or close, to the 39% cap. This includes most owned and operated stations groups within the larger media and entertainment companies, including Nexstar Media Group Inc. (39%), TEGNA Inc. (29%), and Sinclair Inc. (24%). While it is not clear whether the power to relax this rule lies with the FCC or Congress, we believe the FCC will give acquirers latitude to be creative in how they structure the transactions in order to facilitate industry consolidation.

The FCC may tilt the balance of power between the national networks and TV broadcasters. Recently, FCC Commissioner Nathan Simington wrote an op-ed piece in the National Pulse advocating for the FCC to cap the amount the TV broadcasters pay to the national networks (so called “reverse retransmission fees”) at 30%. An FCC attempt to regulate a commercial agreement could be harmful to the credit of those companies that own national TV networks, although they could potentially pull back on programming if it becomes more difficult to meet ROI thresholds.

Roll The Credits: U.S. Advertising Spending Growth Will Slow

Initial assumption

At the beginning of the year, we expected total U.S. advertising would grow 4.5% in 2025, aided by 2% GDP growth.

Revised assumption

S&P Global Ratings economists now expect U.S. GDP growth will grow 1.5%, down from the March forecast of 1.9% growth. As a result of recent uncertainty, advertising trends weakened in the latter half of March. Some companies began pausing their advertising plans as they became concerned about tariffs and economic uncertainty. This affected the digital advertising platforms, such as Snap, because advertising can be turned on and off quickly on those platforms. In its first-quarter 2025 earnings call, Meta reported reduced advertising spending in the U.S. from some Asia-based e-commerce exporters.

However, those media companies more dependent on TV advertising did not report a slowdown in their first-quarter 2025 results. TV advertising is generally booked well in advance and advertisers are slower to cancel. We believe there is an increased risk that potential declines in TV advertising may not recover when economic growth returns because advertisers may permanently move advertising dollars to online video platforms including streaming.

We believe the recent 25% auto tariff, which has already resulted in a tightening supply of imported autos, could decrease automotive sector advertising spending. The timing of this advertising pullback is unfortunate for advertisers and media companies as the TV industry moves into the TV upfront for the 2025-2026 broadcast season. Advertising softness today could have carryover effects into advertiser demand and cost per thousand viewers (CPM) pricing for the upfront, leading to greater uncertainty for the advertising market over the rest of the calendar year. As a result, we lowered our 2025 advertising growth forecast to 3.7% from 4.5%. We view a weak advertising environment as part of the normal economic cycle; advertising declines may negatively affect our rating outlooks on some media companies, but are less likely to lead to rating actions. Companies with credit metrics currently above our downgrade thresholds that need a healthy advertising market to aid leverage reduction are most at risk for outlook revisions or downgrades.

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As Seen On TV: A Ban On Pharma Ads Would Have Limited Effect

Initial assumption

The Trump administration could implement rules that would regulate, or even ban, pharmaceutical advertising on TV.

Revised assumption

We believe this still could happen because the new U.S. Secretary of Health and Human Services (HHS), Robert Kennedy Jr., has yet to announce his plans for regulating pharmaceutical advertising. We believe the potential effect for the media companies is small and depends on each company’s exposure to advertising. Pharma advertising accounts for about 5% of all advertising and about 10% of linear TV advertising. If it were restricted, we believe media companies could replace the available inventory with other advertising but may have to accept lower pricing (though we believe pharmaceutical advertisers may receive discounted CPM pricing for signing multiyear advertising agreements). TV CPM pricing has already been under pressure as audience ratings fall and advertisers shift ad dollars away from linear TV. The loss of a major category could put further pressure on pricing and margins especially for non-sports programming such as general entertainment, prime time, and news--all of which are experiencing mid- to high-20% audience declines. We believe any available inventory on sports programming, which remains in high demand, would get filled without any significant change to pricing.

Increasing Bandwidth: Wireless Spectrum Auctions Now Expected

Initial assumption

We did not expect any significant wireless spectrum auctions over the next few years.

Revised assumption

Under the Biden administration, the FCC had little success in freeing up wireless spectrum that it could auction to the wireless carriers. The FCC’s authority to auction wireless spectrum had lapsed in March 2023 and the agency had also been unable to convince Congress to reauthorize it. As a result, we did not expect any significant spectrum auctions over the next few years. We now believe there may be three spectrum auctions as the FCC under Chairman Carr has made freeing up wireless spectrum a higher priority.

Auction 113 / Reauction of AWS-3: This is the spectrum that the FCC reclaimed from DISH after the U.S. Supreme Court ruled that the company should have been ineligible to bid on the spectrum. The spectrum consists of 200 licenses in the 1695-1710 megahertz (MHz), 1755-1780 MHz, and 2155-2180 MHz bands. In March, the FCC sought comments on the competitive bidding procedures and auction design. Congress has authorized the FCC to hold an auction by mid-2026, and we believe it could generate total gross proceeds in excess of $8 billion.

Upper C-band spectrum (3.98-4.2 GHz): The FCC is exploring how it could free up spectrum in the Upper C-band (the FCC launched a notice of inquiry in February 2025). The FCC could repurpose this mid-band spectrum to allow for communications services, like it did in 2020; currently, the spectrum is used for fixed service satellite (FSS) operations. SES S.A., which would control over 90% of this spectrum if its proposed acquisition of Intelsat S.A. is approved, has said that if the US government were to approve the merger could free up an additional 100 MHz of C-band spectrum. This spectrum is adjacent to the C-band spectrum that was auctioned to the wireless carriers in 2020 and so would likely attract strong demand. The FCC would need to negotiate terms with SES and timing would depend on when SES would be able to clear the spectrum.

Four versus three wireless operators: We believe the FCC could allow a three-player wireless network operator market. As a result, we believe the FCC could permit EchoStar Corp. to sell its spectrum holdings to the three national wireless operators. The FCC recently opened a docket seeking comment on the company’s use of its 2000-2020 MHz and 2180-2200 MHz spectrum bands and one seeking comment on the validity of the already approved construction extensions for its AWS-4, Lower 700 MHz E Block, 600 MHz, AWS-3, and AWS H Block licenses. A sale of the spectrum would be complex, requiring concessions from all stakeholders and flexibility from the FCC regarding its spectrum caps.

Bring Up To Speed: BEAD Program May Include Alternative Providers

Initial assumption

The U.S. government rewrites Broadband Equity Access and Deployment (BEAD) program funding requirements to be technology neutral, which will allow for alternative providers like wireless and satellite technologies to bid on and win funding.

Revised assumption

The BEAD program, established under the Infrastructure Investment and Jobs Act (IIJA) in November 2021, seeks to expand high-speed internet access to previously unserved or underserved areas of the United States. The program, which plans to spend $42.45 billion, prioritized deploying optical fiber technologies even if less expensive alternate technologies were available. We believe a review of the BEAD program will occur after the Senate confirms a new National Telecommunications and Information Assistant (NTIA) administrator; the Senate vote nominee Arielle Roth will likely occur before the end of May.

We expect changes to BEAD will include allowing alternative providers, such as Fixed Wireless Access (FWA) and satellite operators to receive BEAD funds, and relaxing or eliminating a number of requirements including a low-cost price ceiling and strict letter-of-credit (LOC) funding. It remains uncertain how these changes will be implemented because the money has already been allocated to the states (but has yet to be awarded--except for in Louisiana, Nevada, and Delaware). We expect the alternative providers could win awards in very rural markets where it isn’t economic, even with government subsidies, to build out fiber-to-the-home (FTTH).

Related Research

• U.S. Film And Television Brief: Will 100% Tariffs On Movies Made Outside The U.S. Hurt Hollywood?, May 19, 2025
• Global Credit Conditions Special Update: U.S.-China Tariff De-Escalation Brings Some Temporary Relief, May 15, 2025
• Economic Research: U.S. Economic Outlook Update: Higher Tariffs And Policy Uncertainty To Weaken Growth, May 1, 2025
• Global Credit Conditions Special Update: Ongoing Reshuffling, April 11, 2025
• Gauging The Business Risks Of Local U.S. TV Broadcasters (2025 Update), March 27, 2025
• U.S. Advertising Forecast Remains Robust, Jan. 22, 2025
• Industry Credit Outlook 2025: Media and Entertainment , Jan. 14, 2025
• Industry Credit Outlook 2025: Telecommunications, Jan. 14, 2025
• U.S. Telecom And Cable 2025 Outlook: Convergence, Consolidation, And Disruption, Jan. 13, 2025
• U.S. Media And Entertainment: Looking For The Winds Of Change In 2025, Dec. 12, 2024