Bottom-Line: Media Cos. Must Restructure Or Face Consequences

BOTTOM-LINE: MEDIA COS MUST RESTRUCTURE OR FACE CONSEQUENCES
[SOURCE: Media Post, AUTHOR: Diane Mermigas]
[Commentary] Media companies are in a valuation nightmare. Their problem: being valued almost exclusively on old models and metrics, while not yet reaping the balance-sheet benefits of an unfolding digital nirvana. Their challenge: to accurately assess their stagnating traditional businesses and rising revenue streams while shaping growth prospects. This inevitable valuation quandary is underscored by a spate of grim earnings forecasts for media and entertainment companies from Wall Street analysts, who are also wrestling with the complex assessment challenge. It is an issue for investors and deal-makers trying to project beyond the single-digit, even negative growth expected for more traditional TV, film and print. It is also an issue for labor and management, which are struggling to construct plans for future income. It will be years before media-company balance sheets, forecasts and valuations substantively reflect digital growth potential. Until then, this schism will handicap everything from routine finances to major acquisitions.
http://blogs.mediapost.com/on_media/?p=77