Dorian Benkoil - Investor: Private Equity Beat Media to Deals

Could the frenzy of private equity-fueled media deals be over for now? That’s what some analysts and participants seem to feel.

With capital cheap and money chasing deals, “private equity was consistently beating companies that had synergies” in purchasing media and entertainment companies that were for sale, according to Steven Price of private equity investment firm Centerbridge Partners, Monday’s Convergence 2.0 conference from The Deal.

But with the credit crunch well in swing, buyouts are getting harder. “Sellers are unlikely to put their assets on the blocks, even if there are synergies. They want private equity to drive up the price,” he continued. If the seller does put together a deal, the financing for private equity that’s available is at a pretty unattractive price, he said.

He also said the market was more “bifurcated” than he’s seen in the 20 years since he started doing this kind of work. Corporate America thinks things are going fine, but banks are in trouble, and credit is very tight. “It’s not clear if the liquidity problems are going to turn into operating problems.” Maybe it’s just a matter of time.

Dorian Benkoil is a senior consultant in digital publishing for Teeming Media, a New York-based media group. An MBA and award-winning journalist and editor, he was a foreign correspondent for The Associated Press and Newsweek, and handled editorial and business matters as managing producer for ABCNews.com and editorial director of mediabistro.com. He writes regularly for the Jack Myers Media Business Report.