For middle-market businesses, the media industry is still experiencing the growing pains associated with the shift to new media. Investors have limited confidence that buyers will be available for traditional media businesses as many of these properties are experiencing declining cash flow trajectories with little value assigned to long-dated out years.
Subscription models, once touted as one solution to decreasing advertising revenues for online publications, are on the decline as the negative impact of paywalls and fees upon readership has proven to outweigh the potential revenues for many publications. The overwhelming number of news and media outlets has placed increased pressure on publications to be the first to break news stories. This competitive pressure, combined with the instant availability of news and information on Twitter and other social media channels, has contributed to a diminished perceived value of detailed reporting.
The trend in consumption across many industries favors tailored and more customized experiences. For the media landscape, this means outlets are searching for new and effective ways to serve up content that is relevant to each individual user. This also means that local publications have been more protected and valued in the market as smaller communities are still more likely to depend on local papers and tv for high school sports coverage, police blotters, local politics and events. These smaller franchises have been more insulated to the declines in readership experienced by national outlets.
Many media companies are marketing their companies and tying valuations to nascent digital platforms. These digital platforms are rapidly growing and will continue to be highly valued by investors but must be careful to manage existing liabilities such as debt and pensions as they develop in the digital space.
Carl Marks Advisors has extensive experience serving a variety of restructuring and advisory roles in engagements in the media industry. From providing strategic and operational advice to companies and boards, facilitating capital growth infusions and M&A transactions, and serving as financial advisors to lenders, our professionals are well-versed in the unique issues media organizations face. We continuously develop creative and holistic solutions to these challenges for our media clients. Our role with media organizations often includes the following:
- Transactional and Capital Raising Services: Carl Marks Advisors has extensive relationships with capital providers who have specialized in companies and industries going through deep structural changes. These relationships can source capital either for legacy, traditional media outlets as well as newer digital platforms.
- Balance Sheet Restructuring: Our team has worked with many companies to right-size capital structures that align with declining revenue streams for media companies impacted by declining subscriber volumes and/or advertising revenues.
- Operational Expertise: Our operators specialize in the day-to-day management of companies in transition. From managing cash flow to building capabilities and resources for new platform efforts, Carl Marks Advisors experienced team can step in at a moments notice to provide assistance and insights to organizations in the media industry.