STX Entertainment, Toronto’s Thunderbird Films, music streamer Spotify and social media powerhouse Snap are also among the companies that could decide to go public.
The dearth of entertainment companies filing for initial public offerings might finally be reversed in 2017, with big names like STX Entertainment, Snap and Univision sending signals about a potential stock market listing.
Many companies weighing an IPO have been scared off by a turbulent time for media and entertainment stocks, many slammed by changing consumer habits in how they digest movies and television these days. The threat of cord cutting alone sent shares of powerhouses like Disney, Viacom and others gyrating during the past few years.
But, with analysts sensing a recovery, public offerings are expected to follow. “A strong stock market is generally good for IPOs,” said Matt Kennedy, analyst at Renaissance Capital, a manager of IPO-focused Exchange Traded Funds.
“No media and entertainment companies have gone public in the U.S. since July 2014 when radio operator Townsquare Media raised $92 million,” said Kennedy. “2016 was the worst market in terms of the number of IPOs since 2009 … Several companies delayed IPOs to 2017, so it is looking pretty good” going into 2017.”
Here is THR’s look at possible entertainment and media IPOs of 2017 in the U.S. and beyond.
CBS Radio
Observers expect the radio unit of CBS Corp. to go public in the early parts of 2017 and then be split off. CBS Corp. chairman and CEO Leslie Moonves told the UBS Global Media and Communications Conference in New York in December that the IPO would happen in the first quarter of 2017.
“Everything is going as planned,” he told the conference. “We’re very pleased.” He also said that CBS Radio president Andre Fernandez was “doing the road show [for the IPO], and there’s very positive feedback.”
CBS explored various options for divesting its radio arm last year, including a sale. Analysts said the IPO filing in the summer was a sign that the company didn’t feel it would get the price tag it deserves in a sale.
CBS Radio operates 117 radio stations in 26 markets, including 1010 WINS and WFAN in New York and KCBS and KROQ-FM in Los Angeles. The company could be worth about $2.9 billion, according to Bloomberg Intelligence estimates last year.
CBS Radio revenue for the first nine months of 2016 amounted to $898 million, down slightly from $907 million for the same period of 2015. Its full-year 2015 loss amounted to $136.5 million on $1.2 billion in revenue.
The IPO comes as CBS Corp. is focusing on its higher-growth TV and other businesses, with the separation further boosting the revenue percentage the company gets from its non-advertising activities. “At the same time advertising is growing, our non-advertising revenue is growing even faster,” Moonves said on the company’s third-quarter earnings conference call late in 2016. “In fact, this type of revenue is growing so fast that this quarter advertising represented just 43 percent of our overall revenue. That’s the lowest percentage we’ve ever had for any quarter in our history. And as we separate our radio business next year, this is a trend that will only continue.”
Telsey analyst Thomas Eagan likes the strategy behind the radio IPO. “Separating the slower-growth radio division will enable CBS to grow fiscal year 2017 by 3.3 percent, 65 percent faster than with the radio operations,” he wrote in a recent report.
Univision Communications
Spanish-language media giant Univision Communications, which was taken private in 2007, has been gearing up for a potential IPO for a year and a half, but has so far not pulled the trigger amid Wall Street jitters related to cord-cutting and other challenges facing the TV industry, as well as market volatility, according to analysts.
The company filed a registration statement with the U.S. Securities and Exchange Commission in July 2015, followed by a preliminary prospectus early last year. Univision has not priced the shares, nor has it said how much it intends on raising in its IPO, but reports have cited a possible $1 billion fundraising target.
Current investors include Thomas H. Lee Partners, Providence Equity Partners, Madison Dearborn Partners, TPG Capital and Saban Capital Group.
Market watchers say the company’s digital acquisitions, including deals for a stake in The Onion and for the takeover of Gawker Media’s sites, have boosted the company’s digital reach, which is seen as a way to possibly…