MEDIA AND ENTERTAINMENT M&A

The $109-billion tie-up between Time Warner and AT&T announced last October meant 2016 was a massive year for mergers
and acquisitions (M&A) in the media and entertainment sector, and recent data suggests deal-making conditions in the
industry should remain solid in the year ahead

M&A APPETITE IN MEDIA AND ENTERTAINMENT

PERCENTAGE OF GLOBAL EXECUTIVES WHO EXPECT THEIR COMPANY TO PURSUE ACQUISITIONS ACTIVELY IN THE NEXT 12 MONTHS

Media and entertainment respondents Global respondents Media and Entertainment CCB average

80%
The appetite
for deal-making
80%
remains well above
the long-term average,
pointing to an uptick in
70% M&A activity in the
first half of 2017
70%

60%
60%

50%
50%

40%
40%

30%
30%

20% 20%

10% 10%
SEP APR SEP APR
APR 2013 2013
SEP 2012 2012 2014 SEP
APR 2011 2014 APR
2015
SEP 2011 SEP
2015
2010
APR
Media and Enter 2016
APR tainment
2010
Capita SE
l Conf
ide nc 201P
e Ba 6
rome
ter (
C CB)
, EY
201
6

ANNUAL GLOBAL MEDIA-TARGETED M&A ($BN)

210.46

200 192.72
The value
of M&A activity 167.33
in the media sector 161.8
reached its second-
150 145.84 highest level in a
decade in 2016
122.86

103.65
100 88.96
73.73 72.35
57.44
50

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Dealogic 2016

EXECUTIVE CONFIDENCE IN MEDIA AND ENTERTAINMENT M&A TOP 5 STRATEGIC DRIVERS

IN PURSUING ACQUISITIONS
Positive Stable Negative PERCENTAGE OF GLOBAL MEDIA AND ENTERTAINMENT
EXECUTIVES WHO AGREED WITH THE FOLLOWING

October 2015 April 2016 October 2016

5% 23%
Growing market share

Number of
11% 8%
acquisition 11%
opportunities 29%
51%
41%
66%
78% 22%
Acquiring innovative startups

6% 5%

15%
Quality of
acquisition 22%
opportunities
34% 37% 43% Acquiring technology or new
production capabilities
60% 58%
42%

14%
7% 6% Acquiring talent

Likelihood 12%
of closing
acquisitions
44% 41% 44%
49% 50%
47% 11%
Reacting to customer behaviour

EY 2016 EY 2016

TOP MEDIA AND ENTERTAINMENT DEALS OF 2016 TOP 5 MEDIA-TARGETED M&A DEALS
IN HISTORY
Target Acquiror Value*
Target Acquiror

01 Time Warner AT&T

$108.7bn 01 Time Warner
$112.11bn
Jan America Online
02 Sky 21st Century Fox 2000 (now known as AOL)
$14.6bn

03 Supercell Tencent 02 Time Warner

$8.6bn $108.7bn
Oct AT&T
2016
04 Yahoo! AOL
$4.8bn
03 Time Warner Cable

05 Media General Tencent $87.4bn

May Charter
$4.5bn 2015 Communications

06 Starz Lionsgate
$4.4bn 04 DIRECTV
$66.51bn
May AT&T
2014
07 Playtika Yunfeng Capital, Giant Interactive Group

$4.4bn

08 Dreamworks Animation NBCUniversal 05 AT&T Broadband

$60.7bn
Jul Comcast Corp
$4.1bn 2001

* Including debt
Company press releases Dealogic 2016