Survey: More Media Mergers and Buys Expected in '07

But Execs Worry About Quantity -- and Quality -- of Properties up for Grabs

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NEW YORK (AdAge.com) -- Media mergers and acquisitions are expected to outperform last year's levels, according to the latest annual survey from AdMedia Partners, the investment banking and advisory firm that focuses on the publishing, advertising and interactive businesses.
Executives said they believe media merger and acquisition activity will increase this year.
Executives said they believe media merger and acquisition activity will increase this year. Credit: AP

Fewer things out there
More than 70% of media and financial executives surveyed believe that merger and acquisition activity will increase this year. Though a boost is anticipated, the survey found that for the third straight year, a majority (59%) of senior executives believes there are not enough potential media acquisition targets to meet the increased demand.

"Most acquirable property has been sold or bought. There are literally fewer things out there," said Mark Edmiston, managing director for AdMedia Partners. Respondents to the survey, he said, were also concerned about the quality, not just the quantity, of what's coming into the market.

Last November Ripplewood Holdings acquired the Reader's Digest Association for $2.4 billion. , On a much smaller scale, Hartle Media and the McEvoy Group acquired Spin magazine in February for less than $5 million.

Currently on the table are 18 titles from Time Inc., which include the Parenting Group and most of the Time4 Media titles, such as Field & Stream and Popular Science. Second-round bids on the magazines are due in several weeks.

Cross-media deals
Last year, AdMedia forecast increased activity in cross-media deals, and 2006 did bring acquisitions such as that of Reddit.com by Conde Nast Publications in November. Other old-media purchases of new-media property included the New York Times Co.'s acquisition of Baseline StudioSystems, an online entertainment database, from Hollywood Media for $35 million in August, and Time Inc.'s purchase of Golf.com and the company that operates it, SirenServ, in January. Those kinds of transactions can be anticipated in 2007 as traditional media expands into digital options.

"What you're starting to see is not so much cross-media but all media, with companies looking at as many platforms that make sense to help advertising," Mr. Edmiston said.

AdMedia sent out 17,000 surveys to senior executives at media companies and had a more than 10% response rate.
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