Merger and acquisition activity in the entertainment, media and communications business rose 13% to $149 billion in 2015, according to PwC.
While the value of deals rose, fewer deals got done, with 818 transactions announced, compared to 886 in 2014.
PwC is optimistic about strong activity in 2016.
“Growth strategies are primarily being driven by the pace of innovation in the highly dynamic digital ecosystem and companies looking to find their footing in the digital value chain. Some players are choosing to look towards M&A to enhance their current portfolio, while others see M&A as a way to diversify their current service offerings. PwC expects these factors to translate into a robust 2016 deal market focused on maintaining customer stickiness and driving revenues for many years to come,” the consultancy said in a report.
PwC says deal making was particularly busy in the advertising and marketing sector in 2015, though the value of deals was down. “Given the continued shift to digital and the insatiable appetite to consume content across multiple devices, those with engaging mobile and social advertising solutions are proving to be attractive acquisition targets,” the report said.
In cable there were a number of big deals last year, headlined by sales of Cablevision Systems, Time Warner Cable and Bright House. Some of those deals have yet to clear regulatory muster.
“If approved, this could send a signal to the market that further consolidation would be necessary to maintain a competitive marketplace. PwC expects additional M&A as mid-tier cable players look to expand their footprint in adjacent geographies, taking advantage of potential synergies,” the report said.
Sports is another dynamic corner of the content business. Teams are in demand with prices in the big leagues up between 2.5 and 4 times over the past 10 years.
“The industry’s ability to further monetize both digital rights and international expansion of the leagues will be key to driving further industry revenue growth,” PwC said. “Otherwise, the pace of value growth for each league’s clubs could slow, in at least the near-term, as two major existing sources of industry revenue – gate revenue and broadcast rights - continue to mature.”