Sports, Media & Entertainment
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Fundamentals
Size Analysis: Market Cap went from $1.5 trillion to $1.6 trillion over the past quarter. It could be explained by a increase of 6 companies reporting their financial, due to late reporting and market exit. However, we observed a consistent slow recovery quarter over quarter from 2022Q3. The trend in transaction showed a constant decrease in number of observations from 2021Q4 to the last quarter, driving down the total amount of $37 billion transacted per quarter.
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Public Market Dynamics: On the last quarter, the top 20 companies had a higher year over year return compared to the SPY index. The industry median and lower 20 companies are still underperforming. Over the last 8 quarters, the debt to equity ratio remained stable around 15.7%, while the interest percentage of revenues rose from 1.21% in 2023Q3 to 1.27% in the last quarter. Regarding expenditures, COGS and Operating Expenses percentage of revenues decreased over the past quarter, increasing the net profit margin to 1.87%.
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Transaction Trends: The last quarter reported 629 transactions, an increase of 66 transactions. In 8 quarters, it went down by 931 observations. The main reason is a lost of interests in private placements, which was a type of transactions cumulating 1,219 in 2021Q4 and 634 in 2023Q3.
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Dispersion Insights: The part of European and African tickers in the public market increased, giving more importance to Asian and North American companies. This biggest importance is also visualized in revenues share, with the first actor, North America, is followed by Asia. The geographic dispersion is fairer in transactions, with Europe competing with Asia in M&A total value. However, decreasing trend in transaction is global and the dispersion remained unchanged over the past 8 quarters.
Methodology
We screened CapitalIQ using its industry classification. Transactions were filtered by announced date within the last 3 years. Companies were filtered by having a public company type. The main industries selected were "Consumer Discretionary" and "Consumer Services". CapitalIQ sector "Media and Entertainment" and subsectors "Recreational Goods", "Sporting Goods", and "Sports and Related Services" were used to screen the database. CapitalIQ groups "Entertainment", "Media", and "Interactive Media and Services" were used as categories while "Hotels, Restaurants and Leisure" and "Leisure Products" were used to determine the "Sport" category. Our sectors were defined by keywords from the CapitalIQ market intelligent industry classification and CapitalIQ primary industry classification.
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This research report is for informational and discussion purposes only. Information presented here is not investment advice of any kind to any person and does not constitute a recommendation as to the purchase or sale of any interests or as to any other course of action. General, financial, and statistical information concerning the details of this report and related industry are from sources Spaulding Financial believes to be reliable.
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