As indicated by the typical company data, the demand for sport and other entertainments has been increasing significantly in the past several years. The increased demand has been proved by the increased revenue from media rights of those sport leagues, sponsorship, and admission.  

Sector’s Current, Trend, Causes behind trend, and Future

Current and Trend

1. It seems that the demand for sport stream from individuals and for broadcasting content as a media of advertising from business customers in US market has been strong.

2. We have seen continuingly increasing paid network subscription for major stream provider in this sector. However, the growth may be slowing down.

3. We have also seen increased licensing contract from TV media and increasing advertising demand and sponsorship.

4. However, for live events attendance seems to be declining while companies seem to have been able to raise price of ticket. Revenue of toys declined with fewer events and less attendance. Demand for physical media products has declined.

5. Consolidation activities have been increasing as demand for entertainment increases.

Causes behind the trend

1. The upward trend in this industry may be consistent with what is happening in other entertainment and leisure industries and presents undergoing, deep changes in lifestyle and consumption habit in current society. One of examples is that people increasingly spent more time on online media.

2. This trend is also driven by changes in demographic trend.

Industry Future

1. As upward trend in this industry continues, companies may be able to continue to see large growth in their revenue.

General Financial Performance of Companies In the Sector

It seems that the demand for sport stream and broadcasting content in US market has been strong in the past three years. We have seen continuingly increasing paid network subscription for major stream provider in this sector. We have also seen increased licensing contract from TV media and increasing advertising demand and sponsorship. However, paid TV subscription has decreased due to shifting of viewers to digital platform.

However, for live events attendance seems to be declining while companies seem to have been able to raise price of ticket. Revenue of toys declined with less events and less attendance. Demand for physical media products has declined.

Due to increase in network subscription and increased licensing fees and advertising, we have seen largely improved margins since 2015. However, the margin for live event business seems to be declining due to less average attendance and toys sales.

The gross margin, based on typical company’s data, is about 41%.  With about 29% SG&A as percentage of sales, the typical operating margin is about 12%.

The typical enterprise price/EBI ratio is 97.

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