My goodness, it's been an eventful year for the nation's traditional media companies. And while 2006 isn't complete, it appears that the table has been set for 2007 to be even livelier than its predecessor. We haven't yet moved into December, and changes have been occurring so rapidly among media companies of late that even a quick diversion to heed the call of nature can result in one missing a deal announcement or two.

The year in review
Indeed, the pace of media purchases has escalated in November alone, with new private equity deals that likely will expungeClear Channel Communications and the venerable Readers' Digest from the ranks of public media companies. At the same time, Tribune (NYSE:TRB) continues to be examined by private equity types, while simultaneously receiving indications of interest from a passel of Los Angeles billionaires desirous of taking that city's primary newspaper, The Los Angeles Times, off its hands.

And just as those well-heeled private citizens are contemplating an effort to acquire The L.A. Times, across the continent a group of area businessmen, including former General Electric CEO Jack Welch, are conducting a similar effort to acquire control of the Boston Globe from New York Times (NYSE:NYT). Last Wednesday it was reported, however, that the company's own CEO, Janet Robinson, had rebuffed the Welch group's efforts. For their part, Welch and his colleagues appear resolute, and they apparently are pressing forward with their efforts.

Not to be outdone by their publishing brethren, the cable guys also have been making news of late. Last week, for instance, Comcast (NASDAQ:CMCSA) announced a substantial deal with Disney (NYSE:DIS) that will provide the cable company with a healthy portion of precious content for its video-on-demand offering. Less than a month earlier, Time Warner (NYSE:TWX) filed for an IPO of its cable company, the second-largest operator in the cable group.

Actually, one of the first major media deals of the year -- McClatchy's (NYSE:MNI) acquisition of Knight Ridder and its 32 newspapers -- was completed way back in June. McClatchy immediately announced its intention to sell 12 of the Knight Ridder papers. One of the newspapers, The Philadelphia Inquirer, was bought by a group from the City of Brotherly Love. However, that group may now be experiencing a love-hate relationship with its paper, following bouts with labor unions and the sort of revenue and ad lineage shrinkage being experienced by most major newspapers.

The possibilities are endless
Now, as you catch your breath from my overview of the year's frenetic activity, let's consider where some of the names mentioned above might be headed in the remainder of 2006 and in 2007 and, consequently, how they might treat investing Fools. First, let's just assume that the Clear Channel and Reader's Digest acquisitions are completed as expected. Will there then be other private equity transactions in the media space? Almost certainly, the answer is a resounding yes. With private equity firms having raised a record $178 billion thus far this year, and with media companies still being profitable cash generators, the volume of private equity transactions for the traditional media companies seems likely to escalate further.

Take Tribune, for example. It appears to me that the company could go any one of three ways, not including maintenance of the status quo, which I really don't think is an option. First, it could be acquired in a private equity transaction. I just told you about the huge pot of money the private equity types have at their disposal, and with Tribune generating about $1.5 billion in EBITDA (earnings before interest, depreciation, and amortization) annually, its attractiveness is apparent. But private equity bids submitted earlier this month were reportedly lower than had been anticipated at Tribune, and so the future for this option remains somewhat cloudy.

Alternatively, the company's properties could be acquired piecemeal, possibly with some newspapers in a package and others -- the Times and TheBaltimore Sun, for example -- being sold to locals. The broadcast assets would be sold either in clusters or to one major buyer. But Philadelphia has served as something of a laboratory example of one-paper local acquisitions, and that example has hardly been positive.

Finally, Gannett (NYSE:GCI), the industry's behemoth with more than 90 daily newspapers and a raft of broadcast properties, could acquire Tribune outright. I personally cannot predict the likelihood of this sort of traditional acquisition, except to say that I wonder about the sagacity of layering a group of atrophying papers and broadcast operations atop others experiencing a similar fate.

For Times, I'd judge the options to be somewhat similar to those of Tribune, except that I see minimal likelihood of an acquisition by another publicly held publisher. At the same time, there is at Times the aspect of Morgan Stanley Investment Management's 7.6% stake in the company, along with its accompanying demand that the dual-class share structure -- which strongly favors the founding Sulzberger family -- be altered. I also have difficulty handicapping how the next year will play out at Times, although I believe that its prospects for becoming yet another notch on the handle of major deals is somewhat lower than is the case at Tribune.

As for Comcast and Time Warner, I anticipate a continuation of the strengthening that has picked up speed so markedly in 2006. Indeed, unlike most other major media companies, Comcast's share price is up more than 50% for the year and Time Warner's has improved 17% since January, and 30% since a July nadir. I'm not hesitant to predict that Comcast will continue to add subscribers at a rapid rate and that its new deal with Disney may presage other content contracts. Also, it doesn't appear foolish to offer up the possibility that Comcast could acquire a major cellular company in the next year or so, thereby fleshing out its telephony repertoire.

At Time Warner, chairman and CEO Richard Parsons got off to something of a slow start when he assumed the company's helm in 2002. Lately, however, he's been a house afire, disposing of 18 of the company's magazines, taking steps to refurbish the AOL Internet division, buying back stock at a feverish pace, and preparing to give his cable operation an element of independence. These steps appear to be agreeing with investors, as indicated by the aforementioned share price improvement. For 2007, I'd expect more careful fine-tuning at the company, including a further strengthening of AOL, which recorded a whopping 46% increase in third-quarter advertising revenues.

Foolish bottom line
More of the same may also be the best approach for Fools and their media investments for at least the near term. The trends that emerged this year will probably only intensify in 2007. Similarly, those stocks that have improved in 2006 (i.e., Comcast and Time Warner) seem far likelier to excel in 2007 than those (read, Times and Tribune) whose very corporate identities are now in question.

New York Times is a Motley Fool Income Investor recommendation, while Disney and Time Warner are Stock Advisor picks. Take the newsletter of your choice for a30-day free spin.

Fool contributor David Lee Smith does not own shares in any of the companies mentioned. He welcomes your comments .