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PwC: Entertainment and Media Deals Jumped in 4Q - Broadcasting & Cable

PwC: Entertainment and Media Deals Jumped in 4Q

194 transactions totaling $125.9B
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After a third-quarter lull, an end-of-year rush powered a big year for mergers and acquisitions in the entertainment, media and communications business, according to PwC.

There were 194 deals in the fourth quarter worth $125.9 billion, up from 172 deals worth $12.3 billion a year ago. In the third quarter, 145 deals worth $19.2 billion were announced.

Seven of the fourth-quarter deals were worth more than $1 billion, led by AT&T’s proposed $85 billion takeover of Time Warner. Another big deal in the media area was CenturyLink buying Level 3 Communications and dick clark productions being bought by the Dalian Wanda Group.

For the year, deals worth $196.5 billion were announced, up from $148.6 billion in 2015, although the number of deals slipped to 710 from 818 a year ago.

“The transformative deals that continue to resonate throughout the EMC sector are beginning to bifurcate the haves and have-nots, leaving certain players re-evaluating their strategy or existing portfolios and how they deploy capital in the market,” said Bart Spiegel, partner, entertainment, media & communications deals at PwC.

There were 28 deals worth $4.7 billion in the broadcast sector in 2016, down from 33 deals worth $5.4 billion a year ago.

In cable, there were eight deals worth $3.9 billion, down from 12 worth $84.6 billion in 2015 when Charter acquired Time Warner Cable.

In the media and content sector, one key theme in deal-making during 2016 was that the race for content has continued unabated, and non-traditional owners of content, such as telecom companies, are willing to pay a premium to pair distribution channels with content ownership, PwC said in its report.

The second theme is the continued interest by Chinese buyers in U.S. media assets, in particular Hollywood studios.

For 2017, PwC said it expects content owners to continue to be highly sought after by a cross section of EMC players and those in the technology sector.
“Pairing the right content with unfettered access to distribution channels is being viewed as the way forward,” PwC said.

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