At the same time, 74% of executives say that their last portfolio review identified an asset to divest. They are looking to shed businesses that no longer fit their core strategy, have slower growth profiles than their core assets or require significantly more capital allocation than core assets.
Confidence in performance
Executives remain highly confident in their current performance — 100% expect improving or stable corporate earnings in the sector. What's more, 100% also see the global economy in which they operate as stable or improving. From a position of confidence, media and entertainment executives are exercising deal discipline on the buy side and exploiting opportunity on the sell side — engaging more tactically above the fray of heated M&A competition and heightened regulatory and political uncertainty.
The number of media and entertainment executives who see an increase in dealmaking competition in this Barometer (88%) has almost doubled in six months — mainly (67%) because of a surge in activity by private equity funds. Three-quarters (75%) say they have failed to complete a deal or have walked away from one in the past 12 months — mainly (61%) because of competition from other buyers or disagreement on price/valuation.
Changing boardroom agenda
Portfolio transformation is the top priority for boardrooms, with 73% of respondents identifying it as one of their top three concerns for the next six months. At the same time, boards' attention has pivoted somewhat toward increasing economic and political uncertainty (now up 25 points in six months, to 40%), and regulatory and government intervention (now up 18 points in six months, to 21%). Digital transformation and shareholder activism remain important, with 21% and 38%, respectively, of boards citing them as important.