Content Media and Animation M&A Transactions and Valuations

Between Q1 2020 and Q2 2024, $40 billion was deployed by acquirers in the content media and animation sectors. The sector includes all aspects of film and television, comic book creation and development, and subsectors like animation.  

The content media and animation sectors have experienced turbulent macroeconomic conditions caused by the global pandemic, widespread industry strikes, and lockdowns. Despite this, significant M&A activity has occurred. 

Most transactions conducted and capital invested in the content media and animation sectors were by US- and European-based acquirers. Additionally, strategic acquirers deployed over 73% of the transactions conducted. 

Content media and animation founders and shareholders should be aware of exit opportunities presented by strategic acquirers from the US and Europe. 

• The valuation multiples are based on a sample set of publicly listed podcasting and podcast advertising companies and M&A transactions in the sector. The data was collected on August 8, 2024.
• The sample set trades at an enterprise value to EBITDA multiple range of between 8x and 17x with an increase in average multiples as the enterprise value increases.
• Average enterprise value to revenue multiples ranged from 1x and 7x.

• The median transaction size has ranged significantly with peaks of over $200 million seen in Q4 2020, Q3 2021, and Q3 2023. This was driven by large transactions conducted by private equity firms.
• Q3 2020 to Q1 2021 saw the lowest median deal size of under $5 million, which is likely due to lockdown following the global pandemic and uncertainty regarding the entertainment sector.
• Since Q3 2022, the median transaction size has remained under 5 million, indicating an abundance of smaller transactions.

• Between Q1 2020 and Q2 2024, $40 billion was deployed across 325 film, television, comic book, and animation acquisitions. The average transaction value was $123 million, highlighting the volume of transactions in middle and upper-middle markets.
• The most significant deployment of capital, $17 billion, occurred in Q2 of 2021. Amazon’s acquisition of MGM Studios for $8.45 billion, completed on May 26, 2021, was the largest transaction in the sector.
• While the deal count shows variability, it remains above 10 per quarter. This consistency indicates a stable interest in deal-making, even as the investment amounts fluctuate. The largest deal count was in Q1 of 2022, with 30 transactions.

• Transactions by strategic acquirers in M&A transactions were dominated by deal count in the sector. They contributed 73% of all capital in the sectors while conducting 57% of all transactions. The average transaction size of $144 million highlights the appetite for larger acquisitions. 
• Buyouts and leverage buyouts accounted for $6 billion of capital invested across 90 M&A transactions in the content media and animation industries. The average transaction size of $68 billion indicates the appetite for private equity acquisitions in the lower middle market.
• Add-ons and other transactions accounted for less than 10% of capital deployed.

• US-based acquirers dominated the capital invested in the content media and animation sectors, with over $23 billion across 109 transactions in the category. This could be due to a variety of factors, including the historical dominance of the Hollywood film industry and the abundance of small companies in the sector. 
• European acquirers conducted the largest number of transactions in the sector, 119, but contributed less than half of the capital deployed than US-based, $11 billion. The significant deal count indicates an appetite for smaller content media and animation acquisitions and the abundance of smaller and independent companies in the industry.
• The rest of the world exhibits a noticeable spike in the deal count, but an exceedingly small share of the capital deployed. This implies a wide distribution of smaller deals across various countries not individually listed. These smaller markets collectively engage in a considerable number of content media and animation transactions, but each deal tends to be small, reflecting diverse capital market activities.

---

Content media and animation companies have endured challenging macroeconomic conditions. The sector is dominated by large acquisitions by US-based strategic acquirers and smaller transactions conducted by European acquirers.  

Content media and animation companies should be mindful of exit opportunities. EBITDA multiple in the sector ranged between 8x and 17x in the period with technology and intellectual property contributing significant increases in multiples.

Sources: Pitchbook Data, Jahani and Associates (1), (2).