US stocks just ended their worst year since 2008 as media and technology led a downward spiral. Streaming was messy, linear TV waned, dramatic recoveries were sporadic, inflation, interest rates, unemployment and geopolitics worsened, recession fears hit advertising and M&A nearly stopped. If not, it probably should have (that is, when Elon Musk acquired Twitter for his $44 billion).
“It’s a very complex environment, almost unprecedented,” said Neil Begley, Moody’s SVP.
SmackDown had a winner. The sports entertainment engine he finished the year with WWE making a profit of 38% of his. Runner-up is major broadcaster and new CW owner Nexstar, up 16%.
These were rare exceptions to a year in which all areas of entertainment were flooded with players large and small. Disney, the only media stock on the Dow Jones Industrial Average, not only fell 44%, it also had its worst year since 1974.
See the sector chart below.
Other downsides: Fubo’s stock price plummeted by nearly 90%. Roku, Snap and AMC Entertainment are down more than 80% of his. Warner Bros. Discovery and Lionsgate are down more than 60%. From Netflix to Charter to Soul Chicken Soup, from Apple and Meta to Spotify and Cinemark, it was the Red Sea. National CineMedia has become a penny stock and is at risk of being delisted. Behind the turmoil swirls economic concerns and industry-specific woes stemming from a painful reassessment of streaming priorities, and the slashing of the cord continues to accelerate.
“This year has been as bad as I remember in the media department,” lamented one long-time analyst.
The S&P 500 ended 2022 down 19.4% as of Friday’s close. S&P’s telecom services, one of the index’s 11 sectors, which includes most media and telcos, was the worst performer, down almost 40%. (The only sector to rise in 2022 — Energy.)
DJIA fell 8.8%. The Nasdaq is down 33% on him, the worst hit of any major stock market index. This was not unexpected given the massive turmoil in tech stocks.
After CEO Vince McMahon stepped down in the midst of a scandal, WWE bucked the downtrend and engineered a surprisingly smooth management transition. An internal investigation determined that he improperly paid many women in exchange for remaining silent about their sexual relations. The company, which will soon be renewed with a series of popular shows, is currently run by co-CEO Stephanie McMahon, former CAA sports agent Nick Kern and former wrestler Triple H (Paul Michael Levesque). as Chief Content Officer.weekly show monday night raw When NXT Aired on NBCUniversal’s USA network, friday night smackdown Fox has a five-year contract ending in 2024. Peacock will retain his streaming rights through 2026.
People on Wall Street believe (as in other sports) that more bidders will enter and the price will go up in the next round. The first of his two co-terminable contract negotiations wrestlemania 39WWE’s annual pay-per-view and live-streaming event.
It could also sell itself, as Comcast would likely be the buyer. There has been speculation about it for years. Vince McMahon remains the controlling shareholder, and some analysts suspect he might not be too interested in owning the company if he can’t run it. It may be, but WWE’s financial management is conservative and it has a strong balance sheet with $450 million in cash and about $235 million in debt at the end of the September quarter.
As for Nexstar, the major broadcaster benefits from scale, with multiple stations in some markets with highly competitive political parties. In 2022, his political advertising spending will exceed $500 million. It also has reduced advertising exposure, with more than half of its sales coming from distribution, or resends, making it a historically recession-proof business.
“It was one broadcaster that really hit the political numbers. It has relatively low leverage, pays a healthy dividend, and buys back a lot of stock,” said one analyst. increase.
A measure of a company’s financial health, net leverage refers to net debt as a percentage of EBITDA (earnings before interest, taxes, depreciation and amortization). In a world of high and rising interest rates, debt is once again becoming a major problem for businesses. Factors like the coronavirus and supply chain disruptions from the Russia-Ukraine war have pushed inflation soaring to his 40-year high, prompting the Federal Reserve to announce his seven rate hikes in 2022. The we.
Another broadcaster, Tegna, was also up, up 14%, likely largely due to Standard General’s pending $24 per share acquisition. Ad giant Omnicom also outperformed his 2018. But it’s an unusual situation to be able to count all the risers across media and technology on one hand.
Among the losers, Fox lost just 17%, lower than most companies. It’s still a Wall Street favorite, financially conservative, bigger in sports and news, and less exposed to the streaming wars than its rivals. I don’t like the idea of corporate reunification. That will happen next year.
As the media enters 2023, Wall Street understands a big existential dilemma. But now there is a demand for a clearer path to profit. No quick fix in sight. However, as the industry evolves, there is a learning curve. Streaming is still pretty new to everyone outside of Netflix, and even pioneers are trying to adapt.
One investor said, “It’s been a terrible year for stocks, but you could argue that, on the flip side, it’s already starting to reflect most of the bad news” — or at least that’s the hope.