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Backstory: Springtime for media

by Richard Morgan | Published April 8, 2013 at 9:28 AM

What's that? Recorded-music revenue actually rose last year, ending a 12-year losing streak? And after seven years of cratering, the similarly pirated home-video market also eked out a legitimate gain? As if that's not enough to process, Warren Buffett continues to scoop up newspapers as if they're M&A targets suitable for the likes of investors as sophisticated as, well, the Sage of Omaha.

Didn't Buffett get the memo, the one saying media and entertainment properties are dead, dying or still waiting to be disrupted? Or could it be we're beginning to experience those green shoots we have been hearing about forever but have never actually seen? I, for one, really hope it's the latter.

This business of covering M&A in M&E has been a little more meta than I had in mind on joining The Deal in advance of its inaugural edition 13 years ago. We started out as a dead-tree daily newspaper -- one of the last launches of its kind, to be sure -- and we've subsequently changed no less dramatically than our M&E counterparts in other sectors. We're now completely digital, having abandoned not only our daily print run but, later, an extended run as a weekly-magazine-cum-website.

The overarching theme throughout, for me as a reporter as well as for me as an employee, has been disruption. The havoc it wrought was inconceivable until, of course, it became inescapable. Bankruptcy of the music company that gave us the Beatles: Check. Not one but two immersions in Chapter 11 by once-rich magazine publisher Reader's Digest Association Inc.: Check and check. The decades' long roar of Leo the Lion reduced to a whimper by Metro-Goldwyn-Mayer Inc.'s creditors: Check again.

The list goes on and on ... even before the liquidity crisis. The latter, however, did skew our M&E coverage, as filtered through our M&A prism, even more toward restructurings, distressed sales and issues of corporate governance. The inside joke for a while was, if The Deal didn't have such a good business covering bankruptcies, we might have gone bankrupt ourselves.

Adding to my sense of meta, understandably, was The Deal's being acquired in September by TheStreet Inc. Say what you will about the merits of the deal for The Deal, which are undeniable, it also made up close and personal what M&A reporting had kept a step removed and thoroughly professional. For better or worse, we Dealers got hit with the whole M&A schmeer -- the rumors that precede a transaction, the layoffs that come with it and a sense of dislocation while adjusting to a new office and a new regime.

It's good to see that The Deal is already back to hiring, back to building an editorial team to cover the M&A resurgence many believe is just ahead. Although I'm tempted to temper any optimism by cautioning we're not out of the woods yet, the very phrase brings back memories of a perpetually troubled media company I covered a couple of decades ago.

The company's long-awaited turnaround had so many promising but ultimately false starts that analyst after analyst invariably ended his research report, after updating investors on whatever progress the company had made, by noting they're not out of the woods yet. This went on for so long that a particularly contrarian analyst couldn't resist beginning his report with the supposition: "Maybe they like it in the woods?"

Having lived with this metaphor for quite a while myself, I can state unequivocally it's not always fun living what one's covering. And vice versa. But I hasten to add that being in the woods of disruption is always challenging, often stimulating and never boring. Besides, what better place to observe those green shoots?

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Backstory: Springtime for media

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