Media and telecommunications: US Deals 2024 outlook

Signs of recovery in M&A activities: Opportunity amid uncertainty

The slowdown of deal activity in the media and telecommunications sector continued through the second half of 2023, with an uptick in deal value primarily driven by the $27 billion stock merger between DISH Network Corporation and EchoStar Corporation. Without this transaction, deal values would have been $68 billion — commensurate with the first half of 2023.

As the Writers Guild of America (WGA) and Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) strikes have officially concluded, we expect to see upward momentum in the sector and an increase in transformational deals and creative deal structures. Looking ahead to 2024, dealmakers will continue to be resilient during economic and regulatory uncertainty.

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Note: The primary M&A data source used in the year-end outlook is S&P Capital IQ. This is a change from our past outlook reports.​

Key deal drivers

Economic transparency accelerates consolidation

The strikes — WGA and SAG-AFTRA — finally reached resolution in the second half of the year. As a result, there is less uncertainty around go-forward economics and the time may be ripe for streaming platforms to re-evaluate their competitive positioning. As cord cutting continues and replacement options and pricing alternatives proliferate, streaming providers may increasingly seek strategic partnerships that have both complementary subscriber bases, accretive intellectual property and an aligned vision and strategy for attracting new subscribers.

Additionally, consolidation should help position the ecosystem to further the decline of linear TV as the remaining market players should have both the motivation and the financial means to aggressively pursue sports rights as they become available (e.g., the current NBA media rights expire at the end of the 2024/2025 season). Since live sports significantly contribute to the stickiness of linear subscribers, any transition of media rights to streaming platforms should serve to accelerate linear churn.

Based on the above, we believe the conditions are ripe for consolidation in the streaming ecosystem as we turn the corner to 2024.

Experiential entertainment drives consumer spend

With the COVID-19-era live event restrictions in the rearview, entertainment and live events enjoyed a boost during the second half of 2023. Taylor Swift, Beyonce, “Barbie” and “Oppenheimer” added an estimated $8.5 billion to the US economy and contributed to the 5.2% gross domestic product (GDP) expansion in the third quarter of 2023. Make no mistake, the experiential economy has returned, and consumers are directing their discretionary spend toward these types of events.

As a result, new entrants are exploring ownership in categories such as major league sports and new technologies designed to capitalize on the continued popularity of these events. For example, geospatial technologies help operators design an enhanced experience for their customers through marketing, branding and engagement before and after events. Additionally, stadium and district redesigns are focused on driving customer experiences year-round through improved design, technology and experiential entertainment.  

Overall, we expect this trend to accelerate in 2024 as market players look for new ways to engage with their customers and follow discretionary spend. Look for investments, joint ventures and partnerships to drive opportunities and growth in 2024.

“Despite continued financing challenges and regulatory pressure, we nonetheless expect an uptick in 2024 M&A as market players have spent the last several months re-evaluating their portfolios and are committed to seeking strategic partnerships that can drive growth — all with a consumer-centric focus on finding new and innovative ways to engage with their customers.”

— Bart Spiegel, Global Entertainment & Media Deals Leader, Partner, PwC US
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