Working paper

Media Mergers in Nested Markets

David Martimort, and Wilfried Sand-Zantman


We analyze the effect of media mergers in a model that stresses, on the one hand, the fact that media are two-sided platforms willing to attract advertisers and viewers and, on the other hand, that strong competitors have emerged to challenge traditional media on both sides. We show that a merger has two conflicting effects on traditional media’s incentives to invest in quality programs and to exploit their market power. When competition is primarily between traditional media, a Business-Stealing Effect dominates, and the merger is detrimental to advertisers and viewers. When the competition is mainly between the traditional media and their new competitors, an Ecosystem Effect dominates, and the merger benefits advertisers and viewers. We extend this setting to discuss the role of financial constraints that might limit investments in the quality of programs and show that the same effects are at play.


Media; competition; merger;

JEL codes

  • L82: Entertainment • Media
  • L22: Firm Organization and Market Structure
  • G34: Mergers • Acquisitions • Restructuring • Corporate Governance


David Martimort, and Wilfried Sand-Zantman, Media Mergers in Nested Markets, TSE Working Paper, n. 23-1492, December 2023.

See also

Published in

TSE Working Paper, n. 23-1492, December 2023