Entertainment, media and communications deal insights

April 2013
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Entertainment, media and communications deal insights

At a glance

A number of sectors were very active in M&A in 2012 and 2013 is poised to be a big year for growth. PwC has identified five key drivers of M&A activity in the sector in 2013 in their report, 2013 Deal insights for the Entertainment, Media and Communications industries.

During 2012, we saw headline-grabbing, high-profile transactions in the Entertainment, Media & Communications (EMC) industry, and 2013 is shaping up to be no different with the announcement of several billion-dollar deals in the first quarter of 2013.

But beyond the headlines, we see fundamental changes happening at companies of all sizes, across several EMC sub-sectors. Additionally, we’re seeing more and more companies continue to assess their portfolios and divest non-core assets as part of their go-forward strategy.

In this report we identify 5 key themes we believe will drive M&A activity:

  1. The need for spectrum to keep up with consumer demand for data
  2. Monetization of quality content and finding a position in the digital value chain
  3. Opportunities for growth in international markets
  4. Unlocking value for shareholders and refocusing on core assets
  5. Blurring the line between Technology and EMC

About PwC's 2013 Deal insights for the Entertainment, Media and Communication industries

PwC analyzes mergers and acquisitions (M&A) activity and industry trends impacting the entertainment and media (E&M) sectors annually and shares its view on the factors that drove deal activity in 2012 with PwC's expected deal trends for 2013. E&M companies may find the analysis insightful and useful as they evaluate the E&M deal environment over the next 12 months.

Please review select insights below or click here to download the full report.

2012 by the numbers

  • After three consecutive years of declining deal values across the EMC sectors, 2012 saw a return to a more robust deal environment. EMC announced deal volumes declined from 931 to 839 from 2011 to 2012, respectively; however, announced deal value increased from $55.0 billion in 2011 to $96.2 billion in 2012, led by the Softbank/Sprint Nextel deal of $20.1 billion.

Deals by subsector

  • Overall announced EMC deal volumes (with disclosed and undisclosed deal values) declined from 931 announced deals in 2011 to 839 deals in 2012, driven primarily by small middle-market deals in the Internet Software & Services (ISS) and Advertising and Marketing sectors. However, announced deal value increased from $55.0 billion to $96.2 billion for the respective period. Even with the exclusion of the $20.1 billion Softbank/Sprint deal, announced deal value still increased $21.1 billion, or 38% from 2011 to 2012, driven primarily by sports franchise deals in Recreation & Leisure as well as Film/Content deals.

The CEO perspective

  • According to PwC’s 16th Annual Global CEO Survey, Communications CEOs are “ahead of the pack“ when it comes to M&A — as 53% have entered into a strategic alliance or joint venture in the last 12 months, compared with the overall sample average of just 36%. The survey also highlights that CEOs in entertainment and media, more than any other sector, anticipate bringing new products or services to market — 38% versus 25% across all industries — in a combination of organic and acquisition growth domestically and internationally. CEOs are confident about their companies’ prospects for growth and will continue doing deals to capture and maximize opportunities in this fast-changing landscape.