Mergers poised for drop
EmptyMergers and acquisitions in the U.S. entertainment and media sector reached $150.8 billion in 2008, the highest since 2001, but this year isn't shaping up so well.
Last year's impressive figure, in fact, largely was because of a backlog of deals announced in 2006 that took about two years to close, according to PricewaterhouseCoopers, which issued its M&A report Friday.
Excluding that backlog of four big deals, M&A activity last year would have clocked in at $74.6 billion, about the same as in 2005 but well off 2006-07 levels.
Those four backlogged deals were the $27.9 billion sale of Harrah's Entertainment, the $25.9 billion sale of Clear Channel Communications, the $16.2 billion controlling acquisition of DirecTV by Liberty Media and the $6.2 billion merger that created Sirius XM Radio.
There were 1,000 deals closed in 2008, though the values were disclosed in only 283. That's down from 1,202 in 2007, 345 of which were disclosed.
As of Dec. 31, $6.7 billion in deals were pending, a significant drop from the same period a year ago when $100.8 billion in deals were pending.
"While the overall value of closed deals in 2009 will likely remain well below the high-water marks of 2007 and 2008, overall transaction volume may prove a bit more resilient," the report said.
History has shown "the entertainment and media industry to be one of the more active M&A sectors irrespective of market conditions," according to the report.
Other large deals last year included the $3.1 billion acquisition of DoubleClick by Google, the $2.9 billion acquisition of Gemstar-TV Guide by Macrovision and the $1.8 billion acquisition of CNET Networks by CBS.