French broadcaster M6, backed by one of its major shareholders, is pushing for a loosening of French media laws in order to free it up to pursue M&A opportunities, Reuters has reported today. As consolidation across the global media market continues at pace, M6 believes that M&A provides one lever it can use to remain competitive, but French regulatory restrictions make it hard to actually pull this lever.
According to Reuters’ sources, M6 and its second-largest shareholder CMA CGM are lobbying for a change to France’s Freedom of Communication Act, a 1986 piece of legislation which serves as a cornerstone of French media and broadcasting regulation. Under the current version of that act, broadcasters are locked into their current ownership structure for a period after they renew or are granted their broadcasting license, preventing M&A activity. But M6 would like to see this period shortened, enabling it to go after major deals within the next couple of years, including possible mergers with other European broadcasters.
Only a few years have passed since M6 agreed a deal to merge with fellow French TV business TF1. While such a merger between two of the country’s biggest domestic broadcasters would at one time have been unthinkable, there was a belief that regulators could allow it to go through, acknowledging the growing competitive threat of international streaming businesses and tech giants. Even rival local broadcaster France Télévisions backed the merger, stating that more should be done to protect France’s audiovisual sector from international threats.
But in 2022, the deal was called off, as it became apparent that the merger conditions set by France’s regulator were too onerous. In the eyes of TF1 and M6, France’s competition authority had not taken into account “the speed and extent of the changes sweeping through the French broadcasting sector”.
Enthusiasm for the deal remains. Thomas Rabe, CEO of M6’s largest shareholder RTL, said he’d like a second attempt at the TF1/M6 merger, with the EU appearing to rethink its approach towards regulation and competition. And there could be other interested parties too, if M6 was open to a buyer, with Italy’s MFE actively looking to build a pan-European broadcasting champion.
The global vs local conundrum
It’s still not clear though whether France’s competition body would allow a domestic merger. It’s the same questions facing a potential deal between ITV and Sky in the UK. While broadcasters themselves are increasingly open to deals to fend off competition, and are competing fiercely for audiences and ad revenues with US-based businesses, regulators don’t always see the TV market in the same terms.
Ultimately, it depends how you cut the market. It’s true that European broadcasters have to compete against a whole host of media companies of different shapes and sizes for ad budgets which are increasingly planned and allocated globally. In this context, competition is fierce, and a united TF1/M6 or ITV/Sky would have more punching power, but would by no means have any sort of dominant position.
But if you look through the lens of a TV buyer within a local market, it’s a very different picture. If TF1 and M6 were to merge, that brings together two of the three biggest companies you’re likely to trade with, giving that combined entity a lot of leverage. It’s notable that while France Télévisions wasn’t opposed to the proposed merger, French advertiser trade group Union des Marques appealed against it.
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