Media Merger Activity Slows During Third Quarter

PwC says deal volume fell to $19.2B
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Merger activity in the entertainment, media and communications category lost steam in the third quarter, with fewer deals done compared to both the previous quarter and a year ago.

According to PwC, 145 deals worth $19.2 billion were announced during the quarter. In the second quarter, 188 deals worth $41 billion were announced, and a year ago, 217 deals were announced worth $21.3 billion.

With AT&T announcing an $86 billion bid for Time Warner this week, the fourth quarter volume total is sure to be higher.

“Deal activity in Q3 2016 again highlights the importance the market is placing on having a relevant and sustainable digital strategy for the future—all while recognizing data-driven solutions are part of the next frontier,” said Bart Spiegel, partner in PwC’s entertainment, media and communications deals practice.

PwC says the deals made in the third quarter include seven “megadeals,” worth more than $1 billion, up from five in the second quarter. Those include Verizon agreeing to acquire Yahoo, TPG Capital buying RCN Corp., and the Walt Disney Co. acquiring a stake in Major League Baseball’s BAMTech unit.

So far this year, there have been 18 mega deals announced, the highest total since 2011.

“While Consolidation was the most significant driver by sheer volume (representing 65% of megadeal activity), it is innovation and capabilities extension that has inspired some of the most transformative deals—changing the traditional business models that once governed the sector,” PwC said in its report. “Many of these aren’t just ‘big’ deals, they are fundamental for players to survive the disruption caused by technology and as such, have further blurred the conventional lines between media, communications and technology.”

The most active sub sectors were the internet & information subsector and advertising & marketing.

“The continued popularity in the Advertising & Marketing space points to untapped potential around marketing technology and platforms,” the report said.

(Photo via Ervins Strauhmanis's FlickrImage taken on Sept. 19, 2014 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)

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