Dollar value for priced media mergers and acquisitions in 2001 totaled $243.6 billion at year-end, a 65% decline from 2000's record-breaking $702.1 billion and 1999's $692.2 billion.
The cable and satellite sectors topped the list and were the only distinct segments besides TV to show growth vs. 2000. Cable deals were up 92% to $105 billion, and satellite acquisitions totaled 66.4 billion, up 1,437%.
Other leading sectors in total deal value were entertainment, wireless, Internet, technology and publishing ? although these were off between 76% and 94% compared to the previous year.
Media M&A in 2001 was hampered by bearish financial markets and the U.S. economic recession, with total deal counts down 7% vs. 2000. Thus the year ended with relatively high deal numbers and low total priced dollar value.
Cable claimed 43% of the value of deals done in 2001. The near doubling of dollar volume was a result of two multibillion-dollar deals: Comcast Corp.'s purchase of AT&T Broadband for $72 billion (the year's biggest media deal) and Vivendi Universal's $11.3 billion acquisition of USA Networks' entertainment assets.
Satellite came in second for the year at 27% of media M&A volume. The proposed $31.6 billion EchoStar-DirecTV merger represented 47% of the sector total.
Entertainment banked $15.1 billion, or 6% of priced dollars ? down 90%, from $157.9 billion in 2000. The key deal for 2001 was Walt Disney's purchase of Fox Family for $5.2 billion.
Wireless priced dollars dropped 76%, to $11.1 billion, in 2001 from $45.3 billion in 2000; the highlight for the year was AT&T Wireless Services' $2.4 billion acquisition of TeleCorp PCS Inc.
Internet deals dropped 90%, to $10.6 billion from $109.2 billion. Furukawa Electric's purchase of fiber-optic operations from Lucent for $2.4 billion was the largest Internet deal.
Technology claimed $9.5 billion worth of deals, led by the $3 billion Alpha Industries/Conexant Systems merger.
Media mergers and acquisitions for 2002 could end as a mirror image of 2001. The financial markets are still dominated by bears, and the country remains in an economic recession.
Through the first month of 2002, deal numbers are on par with 2001; priced dollars, however, are down significantly. Many media companies are still in such dire financial straits they are being picked up at bargain-basement prices.
The year ahead, however, could be ripe for media consolidation ? as in the movie exhibitor sector or for TV stations ? as companies battle the rough market and hope to come out on the other side bigger, leaner and better.
MEDIA MERGERS & ACQUISITIONS
(BILLIONS)
| sector |
2000 |
2001 |
% chg. |
| CABLE |
$54.6 |
$104.9 |
+92.0% |
| SATELLITE |
4.3 |
66.4 |
+1,437.0 |
| ENTERTAINMENT |
157.9 |
15.1 |
-90.4 |
| WIRELESS |
45.3 |
11.1 |
-75.6 |
| INTERNET |
109.2 |
10.6 |
-90.3 |
| TECHNOLOGY |
166.4 |
9.5 |
-94.3 |
| PUBLISHING |
29.5 |
5.8 |
-80.4 |
| TV |
4.1 |
5.8 |
40.2 |
| TELECOM |
81.0 |
5.7 |
-93.0 |
| RADIO |
23.5 |
4.4 |
-81.2 |
| ADVERTISING |
10.0 |
2.8 |
-72.5 |
| MISC |
0.1 |
1.5 |
1,171.4 |
| NEWSPAPERS |
16.1 |
0.1 |
-99.1 |
| Total |
$702.1 |
$243.6 |
-65.3% |
| SOURCE: KAGAN WORLD MEDIA |
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