Who will buy back Europe's media industry when private equity has done its work?

Financial News has a handy assessment of private equity’s rampant thirst for media companies.

The Europe-wide boom in media buyouts started in mid-2006. During the past 12 months alone, 42 media buyouts deals worth Euros 6.5bn have been finalized in Europe.

These are enormous numbers. The spike on the graph that accompanies Financial News‘s story would make Jimmy Choo proud.

It’s obvious why. Private equity funds are recycling experts. They take away difficult propositions, knock them into shape or convert them into something else — and then sell on the revamped article.

The size of the private equity boom tells you that stock market investors are seriously spooked about the future of media. Across Europe, they’ve been calling in the recycling experts willy-nilly for the past two years.

All well and good. But as David Gilbertson, the newly-appointed chief executive of EMAP, wrote in an email to staff in April:

At some point, private equity firms sell their stake in the business for more than they paid for it and retire to the wine bar.

Question is: two or three years hence, who will underwrite all of that champagne? Or as Crevan O’Grady, head of media at 3i, puts it in sober fashion: “The question is where the exits are going to come from.”

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