Media Finance Outlook Q4 - Q1

“We are seeing ‘green shoots’ — conversations include expectations of growth in 2021. What’s driving the demand for capital is less about weathering the Covid-19 storm and more about expectations of increased demand.”

Executive Summary:
While interest rates are forecast to remain low, risk related to loan defaults is rising. Q4 onto Q1 will likely perform close to normal levels with strength building after Q1 in 2021. New corporate debt facilities could come with higher costs of capital associated with elevated risk profiles.

Indicators of Strength:

• Digiday: “Between one of the least traditional but most-watched elections this country has ever seen, and with the holiday season approaching quickly afterward, they have ample opportunity to make up for the missed revenue goals and metrics earlier in the year.”

Indicators of Weakness:

• Fitch: “U.S. institutional term loan default rate is expected to finish higher for the ninth consecutive month.”
  

• Wharton: “GDP growth dips in the near term because of some distorting effects of changes to the tax system and in health care benefits.