Bad News For Bankers: Floor Falls Out Of Media Deal Market Through Q3; Online Holds Up Admirably
This story was written by Joseph Weisenthal.
Here are some more numbers to confirm what you already know: At least through Q3, the deal market is getting ugly. The latest numbers from Jordan Edmiston Group pegs total M&A volume through the end of September at $26.6 billion, a nearly 70 percent decline from $87.5 billion a year ago. In terms of the number of deals, this year is pretty close to last 619 vs. 636, so what we're seeing is a big contraction in size. Here's how JEGI puts it: "So far, 2008 is a tale of two markets. Banking and debt market upheaval
and an incipient pullback in advertising spending have led to an overall slowdown in M&A. However, midsized and smaller transactions, particularly in growth sectors, such as online media, interactive marketing services and database information, have kept pace with 2007."
So deals like AOL buying SocialThing continue apace. But there's been nothing like News Corp (NYSE: NWS). buying Dow Jones (in Q3 specifically there were zero newspaper dealsno matter how cheap they get, everyone is convinced they'll get cheaper) or ClearChannel (NYSE: CCU) selling out to private equity.
Online media did hold up quite well, with dollar volume slipping only 6.9 percent to $7.77 billion. Big deals included the Daily Candy sale to Comcast (NSDQ: CMCSA), and Napster's (NSDQ: NAPS) sale to BestBuy (which hasn't gone through yet). It notes: "The greatest surge in volume was in niche online content businesses, typically for less than $5 million, as the market for small sites became more liquid and
strategic buyers continued to seek complementary addons."
And what was best performing area? Newsletters. Dollar volume of $153 million is up from $139 million last year. You gotta take what you can get. Release (.pdf)
Disclosure: Jordan Edmiston Group is a sponsor of this site
By Joseph Weisenthal