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Focus on Media & Entertainment: RubinBrown Survey Reveals Economic Stabilization on the Horizon

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RubinBrown’s Media & Entertainment Services Group is proud to serve many clients in the media and entertainment industry.
February 7, 2011

RubinBrown’s Media & Entertainment Services Group is proud to serve many clients in the media and entertainment industry. We have experience serving individuals and organizations including:

  • Radio stations
  • Television stations
  • Cable providers
  • Publishers
  • Film producers & directors
  • Entertainment venues
  • Athletes
  • Entertainers
  • Music producers
  • Authors
  • Agents
  • Sports franchises

After several difficult economic years, national industry reports were indicating a slow and cautious recovery. We sought to gain feedback from our clients on this topic and learn more about how your businesses are faring.

As a result, in late 2010, we surveyed our broadcast clients and contacts about their projected revenue growth for 2011, their obstacles to consummating deals, and the latest hot issues affecting their businesses.

The results of our survey are summarized below:

  • A significant majority, 71 percent, of respondents indicated they anticipate revenue growth in 2011, between zero and ten percent.
  • Survey results also reveal that the political cycle is a major driver for revenue projections. It would appear businesses have begun to see stabilization; however it will still be challenging to recapture 2010 political revenue in those states that do not have significant local elections in 2011.
  • 38 percent of respondents identified “unreasonable multiples” as the culprit; however the majority of respondents added that some aspect of economic recovery will have the biggest affect on consummating deals in 2011.
  • Respondents generally felt that the credit market is driving down multiples. A large differential remains between the EBIDTA multiples being used by potential buyers, as lenders and investors look for more realistic expectations for the value of acquired assets, and what sellers are willing to accept. With minimal sell pressure, deals are not being consummated.
  • 33 percent of respondents voted social media as the number one hot topic having an effect on their business.
  • The majority of the respondents in the radio broadcasting industry included the potential performance royalty legislation on their list of hot topics.
  • Economic recovery may not have been noted by most as a new/hot topic however it still made the list for 22 percent of our respondents.

 

Under U.S. Treasury Department guidelines, we hereby inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used by you for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service, or for the purpose of promoting, marketing or recommending to another party any transaction or matter addressed within this tax advice. Further, RubinBrown LLP imposes no limitation on any recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein.

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