Perspectives on Media M&A
Hi,
I recently finished a summer internship at a top EB in London in their media team and I got a return offer to join as a FT analyst next year. Although, I really liked the team and the work was interesting, I am concerned about the outlook for M&A activity in my sector.
Basically my team works with large marketing agencies, broadcasting companies, cable tv and gaming studios.
My experience was very enjoyable, but I feel like the Media & Entertainment industry is already very consolidated, with very few players controlling most of the market (Disney, Discovery, Fox Corp, Paramount, Comcast). Besides, all of them are in the US, so the perspectives in the UK or EMEA are even worse, the only relevant players are some marketing agencies (WPP or Publicis) and some local broadcasting groups (ITV, Mediaset...).
Overall, it seems like the addressable fee wallet is very small, especially if we consider that my EB only provides strategic advisory, so our only product are M&A and restructuring. My dilemma is between joining my team next year and work in an industry that I really like, or try the FT market this winter and target a position in a sector group with better M&A outlook such as Healthcare or Energy.
Would appreciate the views of some folks working in TMT.
I would not worry about this. The best performing MD at my boutique only covers pet food assets (which is a much smaller industry compared to media) and he manages to bring a ton of revenue. Sometimes the best opportunities are in these "niche" verticals.
Great thing about an industry like that is that there are only a small handful of experts, which means those people get to charge the most and almost always know the clients. Someone working in Tech banking is a dime a dozen, while someone in a niece industry almost always has a small world around them.
Hopefully the creator economy / digital media space continues to expand and then the deals might become large enough to become interesting for the bigger M&A advisors
This is retarded. Media is 1. Ever-evolving 2. There are far too many streaming companies that are due for consolidating, as all of them can’t survive
Nonsense post. Media has traditionally been one of the hottest spots in terms of M&A. As another user mentioned above, the industry is constantly evolving and experiencing continuous disruption. In terms of content creation and distribution, new players like The Walt Disney Corp, Amazon, Netflix, Hulu, HBO, Apple, Spotify, Endeavour were not even founded 25 years ago, yet they are capturing a significant share of the market from traditional players like Warner, Fox, Paramount, Sony, Columbia Pictures, AT&T, Metro-Goldwyn-Studios, or Lionsgate.
In TV broadcasting and cable TV, the sector remains extremely fragmented, with many high quality players like Fox, ABC, NBC, Univision, Telemundo, MyNetworkTV, ESPN, Sky Tv, AMC, Discovery, CNN, ION, National Geographic...
As for advertising services, there must be at least 40 or 50 companies with a market capitalisation exceeding $10bn. Companies like Omnicom, WPP, Dentsu, come to mind easily.
Additionally, some banks have Sports within media. With the new regulations in the NFL and the NBA we will definitely see a lot of LBO activity with franchises.
I am not saying media is booming like IA, but I find hard to believe that media bankers will be worse in the coming 20 years compared to their counterparts in tech, healthcare or industrials.
disney not founded 25 years ago? 40-50 advertising agencies above 10bn? at&t a media player? tf?
"There must be 40-50 agencies above $10 billion market cap..." yet you only manage to mention 3, and WPP and Dentsu fall short of 10bn.
Besides, ESPN and HULU already belong to Disney, MGM already belongs to Amazon, and I am sure I am missing some acquisitions here.
Anyway, if OP works in London he/she does not have to worry about these players.
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