While calling 2019 a “transformative year” in M&A in the media and telco sectors, with several megadeals and a shifting relationship between traditional media and big tech companies, PwC reports that overall deal activity and value fell last year.
“The 2019 M&A market softened much more than we had originally anticipated and we expect 2020 levels to be commensurate with 2019,” said Bart Spiegel, U.S. technology, media & telecommunications deals partner, in PwC’s latest Media & Telecommunications Deals Insights. “We believe the dominant market players will continue to focus on their internal strategies in order to solidify their market position in a year that will shift the consumer landscape for decades to come.”
PwC says there were 635 deals in the media and telco space last year, down 27 percent from 2018. Last year saw a notably high level of private-equity-backed deals, accounting fo 28 percent. Overall deal value fell by 25 percent to $91.9 billion, with four megadeals (over $5 billion, including the Viacom-CBS merger) accounting for $40.6 billion.
Looking ahead, leading companies will be focused on rolling out their key strategic offerings, PwC says, “all while evaluating their internal portfolio, looking for opportunities to monetize existing assets and repurpose capital.”
The streaming wars will be a defining theme in 2020 as HBO Max and Peacock join Disney+ in taking on the big tech companies. “In order to attract and retain audiences, OTT platforms will need to produce and/or procure compelling content libraries, data and analytics capabilities and artificial intelligence to predict consumer preferences and content popularity,” PwC reports.
The dominance of live sports is also a key theme, alongside 5G and the continued impact of data on the ad market.