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Media Execs Confident About Industry, Economy

Top executives in media and entertainment are showing confidence in the global economy and other indicators of business health, according to a new study by EY.

When surveyed, 81% of executives said the state of the global economy is improving, up from 52% a year ago. They were also confident about earnings (64%), short-term market stability (83%), credit availability (77%) and equity valuations (56%).

“Media and entertainment executives are more confident about the global economy and key market indicators than 12 months ago. However, short-term headwinds, such as foreign currency volatility and earnings pressure from digital transformation are tempering enthusiasm,” said John Harrison, global media & entertainment, transaction advisory services leader at EY.

“As the industry learns to better harness digital adoption and fully exploit the multiplatform distribution environment, companies are becoming more confident about expanding their offerings and making strategic acquisitions that will improve their competitive advantage,” Harrison said.

Naturally, the executives polled also saw risks to the economy and to their businesses, increased volatility in currencies to be the greatest risk, followed by slowing growth in key emerging markets, the economic and political situation in the Eurozone, increased global and regional political instability and timing and pace of interest rate rises in the U.S.

Executives surveyed overwhelmingly expect the global mergers and acquisitions market to remain strong in the year ahead. When asked if they expect to actively pursue acquisitions in the next 12 months, 59% responded favorably, which is more than double from two years ago when only 25% indicated they were going to actively pursue acquisitions.

Other findings of the report include:

  • Digital continues to have the greatest impact on M&E companies’ core business and acquisition strategies.
  • Foreign exchange volatility is causing concern as a lot of costs are U.S.-dominated and revenue is increasingly international.
  • Structural challenges related to digital adoption persist, which, along with foreign exchange fluctuations, is having a near-term impact on corporate earnings.
  • Respondents are most likely to invest in China, the U.S., the U.K., India and Australia.

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.