US media entertainment scripting comeback
29 August 2002
In its recent report, S&P says some players earnings performance and financial conditions are slowly recovering as a rebound in advertising takes shape.
Already weakened by a poor economy, major destination theme park attendance and guest spending trends are still worrying investors. Perhaps the most visible downgrade in the media and entertainment industry following 9/11 was that of Walt Disney (owner of ABC Television Network). Operations remain under pressure from the weak US economy, and parks and resorts are affected by the global economy, says S&P credit analyst Heather Goodchild.
Prior to 9/11 incidents, television networks were already heading into an advertising recession brought on in part by the demise of an overheated dotcom sector. Newspapers and magazines also continue to face a challenging advertising climate.
Several film entertainment companies delayed some movie releases with violent themes after the terrorist attacks. Over the last year, however, strong feature film releases, a more balanced release schedule, and heavy marketing expenditures have driven theatre admissions.
Many US media and entertainment companies have reduced costs and are now poised for cash flow once there is a sustained pickup. However, the strength of ad demand is still uncertain with the bearish stock market and concern about double-dip recession weighing on the industry.