Press release

2 Apr 2019 London, GB

Sector convergence in media and entertainment sees divestment intent remain at high levels

LONDON, 2 APRIL 2019. Divestment appetite among media and entertainment (M&E) companies remains at near-record highs, according to the EY Media & Entertainment Global Corporate Divestment Study.

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  • 80% of media & entertainment companies set to divest in the next two years
  • 68% say convergence is likely to drive divestment decisions over the next year 
  • Sector companies prioritize value over speed in their approach to divestment

Divestment appetite among media and entertainment (M&E) companies remains at near-record highs, according to the EY Media & Entertainment Global Corporate Divestment Study. The study reveals that 80% of global sector respondents plan to divest in the next two years – up from 33% in 2017 and down slightly from 87% in 2018 –  as they seek funds to invest in digital capabilities and to focus on core assets. 

The study indicates that 75% of companies anticipate more large-scale transformational divestments in the next 12 months. With the line between technology, M&E and telecommunications companies increasingly blurring, 68% say convergence is most likely to drive divestment decisions in the next year, while 58% have reinvested proceeds from their last divestment in new products, markets and geographies.

Will Fisher, EY Global Media & Entertainment Transactions Leader, says:

“Technology-driven convergence, the increasing importance of exclusive content and data, shifting consumer behavior and competition from online players are driving M&E companies to continuously evaluate their growth strategies. In this climate, a strong appetite for divestment prevails, with companies looking to pivot more quickly in pursuit of new growth opportunities. The focus should now be around how to operationalize divestments to reach bigger audiences and build scale to compete with growing content production and data costs.”

The study findings are supported by the 19th EY Global Capital Confidence Barometer (CCB), which reveals that more than two-thirds (71%) of M&E companies are now reviewing and reshaping their portfolios at least every six months, as they continue to actively dispose of underinvested assets, businesses that are no longer core to the portfolio, and those best left in the hands of another owner.

And with 78% of Global Corporate Divestment Study M&E respondents expecting the number of technology-driven divestments to rise in the next 12 months (up from 75% last year), the drive to fund new technology investments continues to be a key divestment trigger across the sector. 

Delays continue to hamper media and entertainment divestment prospects

While divestment intentions are strong across the sector, the study indicates that companies remain slow in initiating the divestment process. Sixty-five percent of respondents say they have previously held onto assets for too long when they should have divested, while 58% state that their last divestment was delayed because they didn’t prepare adequately for associated regulatory requirements.

Fisher says: “As M&E companies continue to review their portfolios more frequently, they will need to ensure that they are also taking steps to prevent delays in divestment decisions, as well as potential value erosion. Preparation is a key differentiator here, and the most successful companies will be those that commit to early planning, while accommodating regulatory requirements, tax risk and private equity diligence where relevant.” 

The study further indicates that 90% of M&E companies prioritized value over speed in their last divestment, up from 77% in 2018. Only 50% of M&E sellers describe their last divestment as opportunistic, down from 65% in 2018. The study highlights that, with unplanned divestments being less likely to achieve a sale price and valuation that meets expectations, the imperative for sellers to build a credible value story with supporting data is now more critical than ever.


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How EY’s Global Media & Entertainment Sector can help your business

In an industry synonymous with creativity and innovation, the bar for business excellence is set high. You need to embrace new technology, develop new distribution models and satisfy the demands of a voracious and outspoken consumer. At the same time, it’s important to manage costs, exceed stakeholder expectations and comply with new regulations. There’s always another challenge just around the corner. EY’s Global Media & Entertainment Sector can help. We bring together a high-performance, worldwide team of media and entertainment professionals with deep technical experience in providing assurance, tax, transaction and advisory services to the industry’s leaders. Our network of professionals collaborates and shares knowledge around the world to deliver exceptional client service, leveraging our leading market share position to provide you with actionable information, quickly and reliably.

About the EY Global Corporate Divestment Study

The EY Global Corporate Divestment Study focuses on how companies should approach portfolio strategy, improve divestment execution and future-proof their remaining business. The 2019 study results are based on 1,030 interviews with 930 senior corporate executives and 100 private equity executives. The survey was conducted between September and November 2018 by Acuris. Media and entertainment highlights are based on interviews with 40 executives in the media and entertainment sector. Key sector findings can be found at