Report: Media Conglomerates Prepared to Weather Crisis

CHICAGO, October 1: U.S. media and entertainment companies
have “generally healthy” liquidity, according to research from Fitch Ratings,
with media conglomerates like Disney and News Corp. positioned well to weather
the current financial crisis.

Fitch notes that Disney, News Corp., Time Warner and Viacom,
among other media behemoths, will be able to cope with current conditions as
they “benefit from strong and stable operating liquidity, diversity of revenues
(non-advertising), [and] meaningful amounts of capacity in the form of cash on
hand.”

The report continues: “Although facing both cyclical and
secular threats, the media and entertainment industry is characterized by
relatively predictable revenue streams and high margins. High free cash-flow
conversion is supported by limited working-capital swings, low capital
expenditure, and (sometimes) low cash taxes. Fitch believes these factors make
some media companies relatively attractive borrowers for banks and bondholders,
even under more selective market conditions.”

—By Mansha Daswani