•  Richard Price David Moore  colin butcher 

    Media – Sector focus

    Author: Richard Price, Managing Director, Colin Butcher and David Moore, Relationship Directors
    Publication date: 01.08.2010

     
    Media groups are cyclical businesses but manage it well. They are survivors. They see a reduction in demand but then, from a lower cost base, it is followed by a bounceback in profitability. Sometimes this bounceback is strong indeed and for management it’s all a question of steely nerves and remembering that recessions do eventually pass, as we’re seeing now.

     
    Owners, managers and bankers suffer concerns, but the situation ultimately becomes an attractive one when the upswing comes – especially for equity holders, as can be seen in stock market valuations this year.

     
    Long-term trends 

     
    However against this cyclical pattern, there is underlying long term change. In this respect it is important to cut through the short term noise, and noise is of course broadcast effectively in the media industry as players track and comment on each other. There is huge long term change occurring in user consumption trends, barriers to entry and increasingly monetisation.

    For acquisitive clients, we look for businesses that have barriers to entry for a time, but beyond that either have content that can cross distribution methods, or distribution methods that can carry more than one type of content. Furthermore, we think there are opportunities for consolidation of long-standing businesses where technological change is challenging previous growth strategies.

    Our clients are reviewing their plans this year as they emerge cautiously from the downturn, and we expect to see a succession of important realignments over the next two years.

    The Major Corporates media team of Richard Price, Colin Butcher and David Moore has a combined banking experience of 59 years, supported by our Capital Markets, Corporate Finance and Risk Advisory teams. Working closely with our clients, we are helping to develop strategies to meet the challenges and opportunities in the media sector, at the heart of our remit to be the best through-the-cycle corporate bank. Consumer behaviour, technological developments and innovation are changing the business landscape daily, creating opportunities for Lloyds Bank Corporate Markets to demonstrate trusted advisor credentials with clients.

     
    Source: This article was first published in Lloyds Banking Group - Perspective Magazine Edition 2.

     

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