Media and telecom M&A activity was vibrant in the first half of 2022 with deals for the 12 months ending May 15 at 1,014 year-on-year, 28% year-on-year, with deals totaling $469 billion. was inflated by tally Elon Muskof the high-profile $44 billion bid Twitter And MicrosoftThe acquisition of $68 billion is planned Activision Blizzard, No deal has been closed yet.
Music, sports and digital advertising deals likely to continue brisk, according to PwCThe latest bi-annual MA and Survey, which is released every June and December. But deal activity among major media companies has slowed recently after a peak driven by content and technology acquisitions to expand streaming services.
Amazon’s purchase of MGM in the first half and the Warner Media-Discovery merger this spring closed within weeks of each other, amid deals focused on acquiring IP that can be monetized across platforms and geographies.
Bart Spiegel Media and Telecom Deal Partner said, “I think expecting another record-setting six months or a year for M&A to continue at this pace that we’ve just seen, Looking at the environment can be challenging.” He added that low stock prices and high interest rates are an issue.
“At a macro level, you have pressure on some companies, if they want to start an M&A strategy, a, ‘Hey, my stock price is down’ – so paying for the stock with something a little bit And two, if I want to access the debt market, it’s more expensive,” he told Deadline.
“When you look at traditional and large entertainment and media companies, I think a lot of them are focused inward right now. They have recently launched streaming platforms, are exploring or adopting an AVOD strategy. You have to make sure your tech stack can support it, your user interface is locked and loaded. They’re preparing themselves for future development.”
in the midst of bargaining. Lionsgate has said it plans to announce a buyer for part of Starz this summer. Blackstone-backed Candle Media, led by Kevin Meyer and Tom Staggs, is snatching up assets.
Inflation, driven by the Russo-Ukraine war and supply chain disruptions related to the ongoing COVID, is at a 40-year high. To counter this, the Federal Reserve is raising interest rates, with a 0.75 percent increase in June expected in July. Uncertainty has plunged stocks in recent months.
“Companies will be very opportunistic, and companies with strong balance sheets will be in a good position to execute on strategic M&A. But it must be compelling, something that is transformative or brings in significant amounts of IP,” said Spiegel. There may be fewer but sellers aren’t necessarily willing to slash basement prices. Nothing “is going to come cheap,” he said. After a flurry of sales over the past year, “I’m not in this market.” , but now there does not seem to be a huge amount of disinvestment.
That said, he said, there is a significant amount of money in the system to make deals and under pressure to convert businesses, the fastest way to do this is through M&A.
The survey noted that private equity deals made up 42% of the total in the sector over the past 12 months, and small to medium-sized tech deals dominate private deal volume.
Music has been a focus of activity as the popularity of music streaming continues to grow with big-name artists (from Justin Timberlake and Shakira to Neil Young, Bob Dylan and Bruce Springsteen) appearing as a high point. Sell catalogues. Market. Buyers seeking to build annuity revenue streams based on intellectual property have variations ranging from traditional labels to new investment funds. There has also been renewed interest in the acquisition of independent music labels and music publishers.
In sports, a mix of streaming, ad sales, sports gambling and other tailwinds have raised team and league values. Private equity firms have recently been allowed to buy into sports teams, previously limited to individuals and family trusts, meaning the cap on demand has been removed while supply remains stable.
And the ongoing shift in digital advertising favors deals with sophisticated audience targeting and engagement tracking.