Sam Powers of UBS recently spoke to Dave Faber on CNBC. The conversation was about the forecast for M&A activity and where it might lead this year. Here are some excerpts that are worth noting.
CEOs are more comfortable with the structural changes they’ve seen in the industry and there are a few things coming out of these key themes. They also need more premium content that consumers want to engage with. Something Faber didn’t touch on is that there’s a lot of push toward international expansion with 20 percent to 30 percent of revenue coming from international. When you talk about capital allocation, the companies have extraordinary healthy balance sheets.
When you look at annual buybacks of 10 percent, most of the large cap media companies have authorizations close to nine percent of their shares outstanding that get refreshed every year. There’s only so much capital you can return to shareholders before shareholders ask the question, do you know what are you doing with this capital? Are there places to invest or are you a balance sheet story... Read More