Media and telecom M&A activity was active in the first half of 2022, with the 12-month trading ending May 15 totaling a record $1,014 and a record $469 billion, up 28% year-on-year. That figure was bolstered by Elon Musk’s high-profile $44 billion Twitter bid and Microsoft’s $68 billion acquisition of Activision Blizzard. No deals have been finalized yet.
Music, sports and digital advertising deals are expected to continue apace, according to PwC’s MA & Survey, which is published every June and December for the last two years. But after a spike in content and technology purchases among major media companies, deal activity that helps regulate streaming services has slowed.
In the first half, Amazon halted the MGM and Warner Media-Discovery merger for several weeks in the spring amid a series of IP-focused deals that could be monetized across different platforms and geographies.
“I think it can be a challenging environment to expect a new record in six months or a year for mergers and acquisitions to continue at the rate we’ve seen in the last 12 months,” said Bart Spiegel, media and telecommunications partner. deal. He said low stock prices and high interest rates are a problem.
“At the macro level, you pressure some companies to say, ‘Look, my stock price has dropped,’ if they want to start a M&A strategy, so paying with something is a bit limited. It’s more expensive,” he said.
“When you look at the big, traditional entertainment and media companies, I think a lot of them are now introverts. They have just launched streaming platforms that are researching or adopting the AVOD strategy. You need to make sure your UI is locked and loaded so that your technical directory can support this. They are positioned for future growth. ”
Wet between deals. Lionsgate said it plans to announce a buyer for some of Starz this summer. Candle Media, backed by Blackstone and led by Kevin Meyer and Tom Stags, acquired the assets.
Inflation, largely caused by the Russia-Ukraine war and the ongoing Covid-related supply chain disruption, is at its highest point in the last 40 years. To combat this, the Federal Reserve raised interest rates, including a 0.75 percent increase in June, the second most likely in July. Uncertainty has weighed on stocks in recent months.
“Companies will be very opportunistic and those with strong balance sheets will be well positioned to carry out strategic mergers and acquisitions. “But it must be compelling, generating significant or transformative amounts of intellectual property,” Spiegel said. Said. Stocks may be low, but sellers aren’t ready to lower their floor prices. “Nothing will be ‘cheap’,” he said. After last year’s sales frenzy, “I don’t see any significant alienation in this market right now.”
However, he noted that there is a significant amount of money in the system to transact and convert under business pressure, with mergers and acquisitions the fastest way to do so.
The survey showed that private equity transactions accounted for 42% of the industry’s total volume in the last 12 months, with small and medium-sized technical transactions still dominating private transaction volume.
As the popularity of streaming music continues to rise, with big names (from Justin Timberlake and Shakira to Neil Young, Bob Dylan and Bruce Springsteen) selling catalogs for what seems important, music has become a hotbed of activity. Sunday. Buyers ranged from traditional labels to new mutual funds trying to generate IP-based annual revenue streams. Interest in independent record labels and music publishers has also increased.
In sports, the combination of broadcasting, ad sales, sports betting and other headwinds has boosted the values of teams and leagues. Recently, private equity firms have been allowed to buy into sports teams, a privilege previously limited to individuals and family trusts, meaning the demand cap is being lifted as long as supply remains stable.
The continued transition to digital advertising facilitates deals with complex audiences and engagement tracking.
Source: Deadline
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