Media Is Biggest Sector In 2010 Corporate Defaults

In this digital age, the media and entertainment industry may be struggling to hold the public’s attention, but they certainly caught the eye of their creditors.

That’s because a third of all large corporations that defaulted on their debt in 2010 were media or entertainment companies, according to a Standard & Poor’s report issued this week. Of the 53 corporate-debt issuers that defaulted last year, 18 of them were in the media and entertainment sector, by far the most defaults in any of the 13 industry groups. Those issuers defaulted with debt worth $12.7 billion. Among those defaults were phone directory printer Local Insight Media Holdings Inc. and financial publisher Penton Business Media Inc., both which filed for Chapter 11 last year. Missed interest payments and distressed debt exchanges are among the other reasons companies defaulted on their debt. “Media and entertainment is a consumer discretionary–and clearly consumers have been rather tight fisted and were slow to start spending again last year,” said S&P Managing Director Diane Vazza.