“Robust Pace” Seen for Media M&A Activity

PwC’s latest Deals Insights report for the U.S. entertainment, media and communications sector expects merger and acquisition activity to remain robust, despite regulatory uncertainties and a tightening of investment from China.

In Q1, there were 256 M&A deals in the sector, up 32 percent on the previous quarter, representing the highest level of quarterly volume for the last two years. Deal value, however, dropped to $10.4 billion due to fewer mega deals (those valued at $1 billion or more).

There were nine broadcasting deals in the period, with a total value of $1.65 billion; two cable deals, valued at $735 million; and 17 film and content deals, valued at $97 million. Advertising and marketing generated the highest number of deals (69), followed by the internet and information sector (65).

“Despite certain regulatory uncertainties, we remain optimistic that M&A activity in the EMC sector will continue on a robust pace for the foreseeable future,” commented Bart Spiegel, partner for entertainment, media and communications deals at PwC.

Those regulatory uncertainties come with a new FCC chairman, Ajit Pai, who is considering a reversal of net neutrality rules. “The upheaval of net neutrality rules could have a far-reaching impact on internet service providers, content providers and, ultimately, consumers,” PwC said. “From a deals perspective, such actions could accelerate the continued consolidation of content providers with distributors, among other things.”