PwC Reports Strong Gains in Media M&A Activity

NEW YORK: The fourth quarter of 2016 saw 194 deals in the entertainment, media and communications sector, a 34-percent gain on the previous quarter, according to PwC.

The PwC US Entertainment, Media & Communications Deals Insights report says that the quarter’s deals had a total value of $125.9 billion, a 555 percent increase on Q3 2016. The period included AT&T’s proposed acquisition of Time Warner. “The marriage between a once traditional telecommunications company and a content creator/curator of this size, the deal exemplifies the themes that have circled this sector for years—the pursuit of quality content, the search for complementary distribution channels and the investment in technology and innovation,” PwC said. “The other six megadeals this quarter (all within the communications and film and content subsectors) tell a similar story revolving around content, innovation, infrastructure and a renewed focus on core strategies by divesting non-core assets.”

Foreign investment in U.S.-based companies was up in the period, accounting for 22 percent of deal volume. The largest increase in foreign investment came from Asia-Pacific countries, with a total of 22 deals. “We believe the U.S. market will continue to remain attractive to Chinese business leaders across all sectors,” the report says.

In the film and content segment, there were 14 deals in total, including AT&T’s Time Warner bid and Dalian Wanda’s purchase of dick clark productions. “The above deals demonstrate two key themes that were evident throughout 2016; the first being 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. The second theme is the continued interest by Chinese buyers in U.S. media assets, in particular, Hollywood studios.”

Bart Spiegel, partner for entertainment, media and communications deals at PwC, commented, “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.”