SIIA Executive Summit: Funders Seek to Pump Life into a Recovering Industry

(by guest blogger John Blossom, President, Shore Communications Inc.) John Suhler, President and Co-CEO of media financier Veronis Suhler Stevenson Partners LLC, provided a revealing analysis of the financial performance of the communications/media sector to kick off his panel of VC-oriented executives. While the VSS earnings and valuation stats point to an industry that’s in a trajectory similar to its recovery from the 1990-91 recession, revenue multiples provide a somewhat flatter trend. Business information services (BIS) were hit harder than the overall communications sector in the latest recession, but promise to bounce back in line with the economy’s overall performance in the next few years according to VSS. But while long-term margin performance still places BIS as a star sector over the last 25 years, margin performance since 1999 lags the VSS Top 50 and is no longer high above the S&P 500’s performance. Bottom line: the content industry is generally healthy and within historical trends, but profits have not recovered fully and may not anytime soon. That spells potential trouble unless new monies can fund new opportunities for growth. Enter the financiers on John’s panel, who in the words of Diana Noble, Managing Director of Reed Elsevier Ventures, have adjusted from their starring role in the dot-com days to being “candidates for best supporting actor.” All to the best, because it seems to be giving financiers a chance to do more thorough due diligence and more careful management selection and nurturing. Roger Krakoff, Partner with JEGI Capital, LLC, sees that we may be at the beginning of “a new golden age,” with lots of exciting opportunities behind institutional firewalls and in companies serving specific verticals. Brush off your elevator speeches, the good times may yet roll again.

This coverage is sponsored by HighBeam Research.

Comments have been disabled for this post