Bank of New York Co., a longtime lender to media and telecommunications companies, is setting up an M&A advisory shop to cater to that industry's merger boom.
BNY Capital Markets Inc., the banking company's securities subsidiary, has hired James K. Mason, a former Merrill Lynch & Co. investment banker, to head the new unit.
Mr. Mason is joining the bank after short stints at UBS Securities and Chemical Banking Corp. He said he decided to move to Bank of New York-which is not a player in the M&A advisory game-because of its dedication to the media and telecom sectors.
"No one understands the importance of the debt product to the media and telecommunications sectors better," Mr. Mason said.
The $63 billion-asset bank is one of the biggest lenders to U.S. media and telecommunications companies. In the first half of this year, it was ranked No. 8 among lenders to the sector, with $7.1 billion of loans, according to Securities Data Co.
In addition, two Bank of New York directors are high-profile media executives. They are John C. Malone, chairman and chief executive of Telecommunications Inc., or TCI, and Frank J. Biondi Jr., chairman and chief executive of Universal Studios.
Mr. Mason, who is to start his new job Aug. 10, will report to Brian Rogan, chief of the bank's capital markets unit. He said he plans to hire more executives for the nascent media M&A group.
"I always try to look within first," Mr. Mason said. "After that, there are quite a few very capable former colleagues who hopefully will have a sense that they would like to come over in the not so distant future."
Looking forward, Mr. Mason said he plans to focus on divestitures resulting from recent multibillion-dollar mergers in the media and telecommunications industries. "That is an extremely good area," he said. "There is almost always a handful of businesses that don't fit the core focus of the newly formed companies."
Laura Martin, a media analyst at Credit Suisse First Boston, said Bank of New York picked an opportune time to start a media M&A shop. "It's exploding in M&A right now, and he will pay for himself in fees just because the sector is so hot."
Already this year, $305.8 billion of media industry mergers have been announced, making it the most active M&A sector, according to Securities Data. In telecommunications, $195 billion of deals have been announced.
The move to Bank of New York will give Mr. Mason a large client roster to call on and the bank a new service to offer its long-standing media and telecommunications clients, Ms. Martin added.
"The thing that differentiates an M&A shop is how great the ideas are, not how long they've been in business," she said.
Before joining UBS Securities Inc., the U.S. investment banking subsidiary of United Bank of Switzerland, in 1996, Mr. Mason had worked at Chemical for a year.
He began his investment banking career at Merrill, where he worked for 17 years. Before that, he was a television station manager.
Mr. Mason said he has job-hopped in recent years because he is "looking for a commitment from a large financial institution to this sector."
In January, Bank of New York boosted its high-yield capability by purchasing Mendham Capital Group Inc., a Roseland, N.J., junk bond firm. The media and telecommunications sector accounts for about 40% of U.S. junk bonds issued.
