The value of some of Britain’s biggest media companies was crunched by the wild market sell-off in the wake of the Brexit vote last week, with sharemarket losses approaching $20 billion in London and New York. In fact, some of Britain’s major media companies shot themselves in their balance sheets by vociferously supporting the Leave case in last week’s UK vote.
Coming after a miserable start to the year for print media (and after a 15%-plus fall in print ad revenues for 2015), there is now renewed speculation that the sector faces even greater pain in the next year or more as the UK leaves the EU. The continued growth of Facebook, Google and Twitter will not go away and will be more the preference of advertisers seeking to overcome the departure of the UK from the huge single, 27-nation EU market.
The most damaged of all listed UK media companies was the country’s commercial TV giant, ITV, whose shares plunged more than 20%, which wiped more than 1.4 billion pounds (close to A$2.5 billion or more than US$1.8 billion) from the value of the company on Friday (ITV shares have already fallen 20% so far this year as ad spending slowed and ratings growth remained weak).
News Corp shares fell more than 5% in New York, a drop of US$350 million. Shares in 21st Century Fox shed more than 7% (or more than US$3.5 billion). Shares in Daily Mail and General Trust fell 5.4% or more than 100 million pounds. And shares in Trinity Mirror fell more than 11% or close to 400 million pounds. Sky shares in London dropped more than 6%, a fall of nearly 1 billion pounds, or more than US$1.3 billion. And the New York listed shares of Liberty Global (which owns Virgin Media, Britain’s second biggest pay TV business) fell more than 13%, or over US$3.3 billion on Friday night.
Adding the losses together and the total is close to US$14 billion (A$19 billion to A$20 billion) in a day.
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