Media and telecommunications: US Deals 2024 midyear outlook

Consumer appetites skew toward value amid economic uncertainty

Deal activity in the media and telecommunications sector continued to be constrained by the prolonged impact of higher interest rates and uncertain regulatory dynamics in the first half of 2024. While announced deal values rebounded slightly from 2023, deal volumes experienced a further decline. Despite that downturn, the sector continues to attract interest as market players continue to evaluate ways to refine their strategies and infrastructure to meet evolving consumer demands, including:

  • Short-form user-generated content platforms have continued to eat into traditional viewing habits, with platforms like TikTok leading the way. Through these platforms, influencers and content creators are shaping the entertainment landscape by attracting brands to collaborate to reach their target audiences.
  • Streaming platforms will continue to evolve their suite of content, leveraging bundled offerings, joint ventures and partnerships to share rising content costs while both promoting subscriber stickiness and curating larger audiences to drive advertising revenue.
  • Emerging artificial intelligence (AI) technologies are playing a larger role in content creation, resulting in more efficient production processes and new creative possibilities. Content creators will increasingly tailor their offerings to individual preferences by utilizing AI and data analytics.  
  • Generative AI (GenAI) is starting to dramatically impact the adtech market. It’s significantly reducing the cost and time required to bring new ad campaigns to market. In parallel, it’s facilitating campaign and creative optimization to drive higher return on ad spend.

Note: The primary M&A data source used in the midyear outlook is S&P Capital IQ.


How market conditions are impacting M&A strategy

After being sidelined by higher borrowing costs, private equity investors are eager to get back into the game and have shown a renewed interest executing megadeals in the sector. In April, Silver Lake announced an agreement to acquire Endeavor in a take-private transaction with a $25 billion enterprise value. In a consumer-centric environment, we expect private equity investors will continue to find attractive acquisition targets in the sector.

Corporate entities are sitting on significant cash reserves in addition to their stock; once the deals market turns around, we expect the already high valuations to further increase as wider pools of buyers have access to capital, spurring more players to evaluate M&A.

Focus on consumer retention

What’s now?

Streaming platforms continue to face challenges attracting new consumers while retaining their existing subscriber base. Players in the streaming space are exploring new avenues ranging from consolidation and bunding to new offerings including video games and live sports to entice consumers to stay within their ecosystem. In a period of inflation, consumers have the upper hand, and we expect they will continue to be drawn to platforms they perceive as providing the best value. To support average revenue per user (ARPU) and limit customer churn, streaming platforms will need to maintain a focus on providing subscribers a compelling value proposition.

We expect regulators and technology platform changes will continue to present obstacles to deal execution in the sector. The digital marketing landscape continues to plan for impact of the deprecation of third-party cookies. In parallel, the environment for privacy regulation continues to evolve unevenly, both globally and inside the US. Taken together, these factors create extra complexity for any transaction in the marketing and media ecosystem.

What’s next?

With the upcoming presidential election looming in the background, we expect potential dealmakers will remain cautious and postpone their evaluations of more transformative transactions until there is less uncertainty around regulations and what the future will hold. In the meantime, we expect buyers will remain vigilant of shifting consumer behaviors, so they’re poised to act when the M&A market eventually turns.

“Amid rising inflation, value perception is key to curb churn and uphold pricing. Though M&A faces challenges, companies with engaging solutions at the right price point will be well-positioned to thrive.”

— Bart Spiegel, US Media Leader and Global Entertainment & Media Deals Leader

The bottom line

In an increasingly consumer-centric ecosystem, companies are focused on finding the most efficient means to reach their target audiences through advertising. We expect an increased emphasis on leveraging emerging technologies to drive investment in adtech.

While the media and telecommunications sector continues to face significant obstacles due to economic uncertainty and regulatory challenges, we expect consumers’ increased focus on streaming, AI technologies and experiential entertainment to spark renewed interest in the sector.  

Explore national M&A trends

Contact us

Dallas Dolen

Dallas Dolen

Technology, Media and Telecommunications Industry Leader, PwC US

Conall Dempsey

Conall Dempsey

Technology, Media and Telecommunications Leader, PwC US

Lori Driscoll

Lori Driscoll

Partner, PwC US

Tiffany Chu

Tiffany Chu

Technology, Media, and Telecommunications Tax Leader, PwC US

Follow us

Required fields are marked with an asterisk(*)

By submitting your email address, you acknowledge that you have read the Privacy Statement and that you consent to our processing data in accordance with the Privacy Statement (including international transfers). If you change your mind at any time about wishing to receive the information from us, you can send us an email message using the Contact Us page.

Hide