By Natasha Gillezeau


Top fund managers believe the coming reporting season will be a sombre affair for the media sector, which was already under pressure before the COVID-19 pandemic.

However, those companies with good cash flow, a strong digital focus and subscription-based models baked into overall revenue diversification will weather the storm better than their rivals.

Wilson Asset Management equity analyst Shaun Weick and Martin Currie Australia investment analyst Patrick Potts have low expectations for the reporting season – advertising spending is down as much as 30 per cent to 40 per cent for the June quarter after advertisers retreated amid the pandemic’s spread in Australia.

Mr Weick says that in general, WAM has put underweight ratings on Australian media stocks because of the structural and cyclical headwinds most of these businesses face following the technological and COVID-19-related disruption.

“My view is that we are really just seeing an acceleration of the structural shift of media and advertising expenditure towards those digital and online channels. And that’s occurring in the traditional media formats like free-to-air, radio, magazines, newspapers and the like,” Mr Weick said.

Read more in the Australian Financial Review.

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