Dec 13 - The credit outlook for the U.S. media and entertainment industry is
stable for 2013, driven by a slow growth ad environment amid heightened fiscal
and macroeconomic uncertainty.
Fitch expects slow growth in advertising sales to continue in 2013. Fitch
projects overall domestic ad spending, the largest driver of operating
performance in the media space, will grow 1%-2% in 2013 on anticipated GDP
growth of 2.3%.
Free cash flow will remain at the robust levels seen in 2012, and credit
profiles are not expected to change materially. The shift towards digital media
will continue, fueled by the rapid adoption of tablets, and TV and to a lesser
degree, radio, will gain from shifts away from print.
Maturity schedules are minimal given recent opportunistic refinancings, and
capital market access is not likely to be a requirement for most companies in
2013. That said, continued opportunistic access to the capital markets is
expected should the rate environment remain the same.
In general, issuer credit profiles remain solidly positioned within their
ratings category. Fitch does not expect significant debt-funded shareholder
return activity in 2013 (as most issuers enter 2013 at their leverage targets),
barring any unexpected shift in financial policy. Even so, moderate increases in
leverage in 2013 would not likely result in negative ratings actions, assuming
the base case operating environment.
The full report '2013 Media and Entertainment Outlook' is available on Fitch's
website at 'www.fitchratings.com.'
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: 2013 Media and Entertainment Outlook