The year 2020, a year that turned the world upside down and changed lives. But what impact did the pandemic have on the media sector? What transactions took place in 2020 and how did the sector cope with Covid-19? These questions and other insights are provided in the first edition of our Media Deal Review, covering transactions, trends, and sector insights in Germany, Switzerland, and Austria in 2020.
The topics of this issue
- Mergers & Acquisitions: Media M&A deal volume fluctuated between 20 to 26 deals per quarter from 2018 to Q1 2020 (with the exception of a weak Q3 2019 when only 16 deals were completed). But deal volumes collapsed in Q2 2020, with just 6 completed deals. Q3 and Q4 volumes indicate a tentative recovery, though Covid-19 will likely continue to negatively impact activity in the medium term. Future activities are expected to be shaped notably by technological innovation, digitalization and new business models.
- Fundraising: Fundraising activity in the first 8 months of the year remained on a par with the previous year’s levels, largely thanks to a robust first quarter accounting for 14 out of the 22 deals in the year to date. Similarly to M&A, Q2 fundraising witnessed a sharp fall from 14 to just 4 deals, with the same number repeated in Q3. The advertising and marketing segment played a key role in the deals taking place.
- Valuations: Multiples in each of the three main “traditional” Media subsectors began falling from the start of the year as a result of the slump in advertising revenues and low earnings visibility going forward. However, some subsectors recorded surprisingly constant valuation multiples.
- KPMG Insights: Experts from the TMT global team have produced a number of insightful publications covering the impact of Covid-19 on media, market disruption, consumer behavior in choosing OTT platforms and other topical issues facing the media sector. Further details and links are provided on page 14.
Dr. Michael Kramer
Partner, Advisory, Deal Advisory
KPMG AG Wirtschaftsprüfungsgesellschaft