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PwC: M&A activity in media rebounds in 2021, but it may not last

Demand for streaming content, rollout of 5G, and strong interest from private equity buyers is helping to drive M&A activity in the sector

A new report from Pricewaterhouse Coopers says merger and acquisition activity in the media industry has had a strong year in 2021, but that might not continue over the next 12 months.

“Following a rebound in the second half of 2020, 2021 proved to be a strong year for M&A activity” the company said, with 804 deals announced and a 27 per cent increase over the comparable 12-month period in 2020.

The value of announced deals in the space totalled a record $233 billion, added PwC.

“As we head into 2022, deal activity continues at a vigorous pace, though it remains to be seen if regulatory changes could slow down activity,” it continued.

The report states that several trends are emerging that are shaping M&A activity in the sector, including the demand for streaming content, rollout of 5G, increase in online gambling and strong interest from private equity buyers as the sector becomes increasingly digital.

It also cites the metaverse as a influencer in M&A activity. “With big tech and media conglomerates entering the fray, it won’t be long before the metaverse starts to drive more deal activity,” says the report. “Meanwhile, companies developing artificial intelligence, virtual reality, augmented reality and connective hardware have already become attractive acquisition targets as interest in the metaverse builds — which we expect to accelerate in the coming years.”

Regulatory uncertainties in the United States could have an impact on activity, warns PwC. “While the regulatory outlook is uncertain, the recently passed infrastructure bill appears to be a boon for the sector, with $65 billion of broadband projects to improve internet access across the country,” the report continues. “This is likely to promote substantial spending in the telecommunications sector and will further bolster 5G rollout — a key component enabling media companies to achieve their streaming and connectivity potential.”

During 2021, TVBEurope has reported on a number of acquisitions, including the acquisition of Masstech by Telestream, LiveU buying Garland Partners, Ross Video’s deal to buy Primestream, Vislink’s $18.3 million deal to buy Mobile Viewpoint, and the on-going speculation around the possible sale of BT Sport.