M&A within the leisure sector: Following a lacklustre yr in 2023, the Media and Entertainment (M&E) business is gearing up for a possible uptick in mergers and acquisitions (M&A) exercise. Industry insiders anticipate a revival, spurred by promising shifts inside numerous segments.

Despite final yr’s subdued efficiency, there are indications of a turnaround as strategists undertake a extra optimistic outlook. Notably, the actual cash gaming sector is stabilising, suggesting a transfer away from cautious approaches.

Traditional media, significantly tv, stays a dominant power in deal worth, pointing in direction of sustained momentum shifting ahead.

“2024 will have challenging trends as far as ad-supported revenue is concerned, however, we expect a steady growth in music subscriptions in India. In 2023 only the top theatrical successes gave a push to music consumption, and 2024 could see similar results. 2024 will provide opportunities for M&A and strategic partnerships,” Vivek Raina of Believe Digital stated. 

Segment Analysis

New media skilled a surge in deal volumes, comprising 86 per cent of transactions, although accounting for less than 35 per cent of complete deal worth. On the opposite hand, conventional media, particularly tv and movie, commanded a big 65 per cent share of deal worth.

Television Segment Dynamics

The fallout of the Zee-Sony merger and the upcoming Disney-Viacom18 deal is anticipated to stimulate heightened M&A exercise throughout the tv sector. This is anticipated to result in consolidation, significantly in regional and digital sectors, in a bid to handle escalating sports activities rights prices and safeguard market share.

“The television segment is expected to see considerable M&A action, to protect and grow market share, in the aftermath of the Zee-Sony merger being called off and the impending merger between Disney with Viacom18.  The domino effect is likely to trigger a further consolidation wave, especially in the regional and digital segments, and to manage the rising cost of sports rights,” the EY and FICCI report acknowledged. 

Digital Media and Online Gaming

These segments witnessed strong deal volumes, signalling a rising curiosity in investments inside digital leisure platforms. Despite tv’s dominance in complete deal worth (63 per cent), digital media and on-line gaming are vital drivers of M&A momentum.

Market Trends

Although 2023 skilled a slowdown in M&A exercise, the business outlook stays optimistic for elevated deal-making within the close to future. Traditional media continues to play a vital function, driving vital deal values regardless of the general downturn. Furthermore, personal fairness (PE) and enterprise capital (VC) corporations retain their prominence in M&E transactions, signalling sustained curiosity and funding within the sector.