To put those stock swings in context, the Dow Jones Industrial Average was down most of the year. But after plunging 35% in March, the index recovered late in 2020 to climb more than 5% year-to-date after Joe Biden’s election win and hopeful coronavirus vaccine news.
Large media companies are struggling with the pivot from massively profitable linear-TV businesses and have had to rationalize their cost structures for much lower-margin DTC streaming, says John Harrison, EY Americas media and entertainment leader. They also have to account for lost licensing and box office revenue.
On the M&A front, industry observers expect 2021 to be an active year in media and entertainment. With the thirst for content, production companies and midtier studios and networks could be ripe for the picking. Speculation has focused on potential deals for MGM, Lionsgate and Discovery. Meanwhile, media companies have shed noncore assets to fuel the streaming pivot, another trend expected to extend into the new year. In 2020, ViacomCBS sold CNET and book giant Simon & Schuster , while AT&T offloaded anime streamer Crunchyroll to Sony Pictures Entertainment for $1.2 billion. And for more than a year, AT&T has been said to be looking to get rid of DirecTV, a $49 billion deal that now looks like an albatross with the satcaster’s deep cord-cutting erosion.