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- High-profile tours by pop musicians Taylor Swift and Beyoncé, as well as the "Barbenheimer" movie phenomenon have spurred US consumer spending this year.
- But private-equity investors have mostly sat on the sidelines while the entertainment industry bounced back.
- The value of PE deals in entertainment firms is on track to hit the lowest level since 2019, according to S&P Global.
The blockbuster twin-movie phenomenon popularly known as "Barbenheimer" has helped revive the entertainment industry this year from its post-pandemic blues – but one key class of investors may have missed out on the party.
Global private-equity (PE) deals in the movies and entertainment industry are on track to hit a five-year low in 2023, according to research from S&P Global.
As of August, just $1.48 billion of PE capital had flown into the worldwide entertainment sector so far this year – a far cry from the $10.27 billion invested through the whole of 2022.
Total investments in the second quarter of 2023 was down over 83% from the same period last year – when $6.31 billion worth of deals were recorded.
Investors have had to contend with a period of high interest rates, a Hollywood writers' strike, and the Silicon Valley Bank collapse — after enjoying record deal volumes just two years ago.
On the other hand, US economic growth stands to benefit from a revival in the entertainment sector.
High-profile concert tours by Taylor Swift and Beyoncé, along with the twin-movie phenomenon that's come to be known as 'Barbenheimer', are projected to add $8.5 billion to US gross domestic product in the third quarter, according to Bloomberg Economics.
That could add 0.5 percentage points to national output for the June to September period, according to Bloomberg economists Anna Wong and Eliza Winger.
The 'Barbenheimer' effect is less significant for individual entertainment stocks, however.
JPMorgan last month downgraded its recommendation for Cinemark, pointing to a limited film supply outlook due to the writers' strike.
While cinema stock AMC has collapsed by more than 70% across August as the meme-stock won approval in a settlement to issue more shares.