European Entertainment Stocks Fall as Greek Crisis Hits Markets
Stock market declines in Europe Monday morning were the sharpest in six months after Greece moved closer to a possible exit from the eurozone.
The stocks of big European entertainment companies fell in early Monday trading as the continuing Greek debt crisis hit stock markets across the continent.
A series of weekend developments pushed the country closer to a possible exit from the euro zone after the failure of bailout talks, affecting markets, observers said. The pan-European Stoxx Europe 600 index was down 2.3 percent around 9 a.m. London time, with Spain’s IBEX 35 and Italy’s FTSE MIB down more than 3.5 percent along with a major index in Portugal. The Southern countries are seen as possibly hurting more than others if nearby Greece defaults on its debt and leaves the eurozone.
Germany’s DAX Index was down around 3 percent at the same time, while the FTSE 100 in London was down 1.9 percent.
Big European entertainment stocks were hit by the market drop. The shares of U.K. TV giant ITV were down 2.3 percent shortly after 9 a.m. London time, while pan-European pay TV giant Sky's stock fell 1.7 percent.
German TV giant ProSieben saw its stock fall 2.8 percent, while French broadcaster TF1 was down 3.4 percent. One of the hardest hit European media stocks was Italian TV company Mediaset, which was down 4.5 percent in early trading.
French media and telecom company Vivendi was doing relatively better, with a 1.6 percent drop shortly after 9 a.m. London time.
"As you would expect, more advertising-dependent names are getting hit more," Liberum Capital analyst Ian Whittaker tells THR. And Sanford C. Bernstein's Claudio Aspesi says: "Entertainment stocks are responding on the basis of their business model and their geographic scope. It is worse to be dependent on advertising than subscriptions revenues, so Sky is faring better than most free-to-air stocks, and it is better to be in more solid countries than in the peripherals, so ITV is faring better than Mediaset."
Bloomberg reported that Monday's stock market declines in Europe were the sharpest in six months.