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The media and entertainment industry regained momentum on several fronts in 2009.
The U.S. economy returned to growth mode in the third quarter, and advertising trends got less bad though they remained mixed for many of the Big Seven media and entertainment companies.
Still, stocks of the seven companies staged a substantial comeback in 2009 after lows hit in March as investors started betting on a rebound that would lift ad revenue and overall fortunes.
These players also re-started select acquisitions, which had grinded to a halt, with Disney’s deal to buy Marvel and cable giant Comcast’s recent play for NBC Universal being the biggest deals in some time.
While all sector CEOs remain cautious on the M&A front amid a still-challenging finance environment and investor fears of ill-conceived transactions, more dealmaking looks to be in the cards for 2010 such as bids for debt-ridden MGM.
Meanwhile, the home entertainment market remains a mixed bag. The new year should provide more insight into how much sluggishness in DVD sales has been due to the recession and underlying maturity of the market, while many studios continue to figure out their relationship with DVD rental kiosk operator Redbox.
This marks the third year in a row that The Hollywood Reporter takes a first look at the performance of the major U.S. entertainment conglomerates and their key business units using data that is available so far.
We once again took into account stock performance and operating profit growth or decline in key entertainment divisions — for the first three quarters of calendar year 2009, which they have reported. (The important holiday season will be included in quarterly results released only in late January and early February, so the picture isn’t complete.)
Based on this analysis that provides a first feel for how 2009 stacked up, THR gave an overall rating for each of the Big Seven. We gave a point each for profit growth in any key segment and a point for stock gains, which every company recorded this year after 2008, which had seen across-the-board declines. We also rounded up scores to the next full or half point if a company made significant strides in key areas.
Company ratings are generally up from or in line with the dismal year-ago frame, but all eyes will now turn to 2010.
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