Fitch Ratings said Thursday its credit outlook for the media and entertainment industries is stable now that the worst of the advertising downturn has past, but noted that risks still lurk in the broader economy.
Fitch has ratings on more than 20 companies in the sector, including CBS Corp., Time Warner Inc. and the Nielsen Co.
Many of them have seen the recession take a big chunk out of advertising revenue as businesses cut back on marketing budgets and consumers shift away from traditional media like newspapers and DVDs in favor of online options.
Heading into 2010, media companies should get a boost from advertising tied to political campaigns and the Olympics, Fitch said. But it warned that some media are likely to be left out of the rebound. Newspapers, yellow pages and consumer magazines will continue to see revenue declines, Fitch said.
In a statement, the agency said, "permanent shifts in advertiser sentiment and excess ad inventory ... will plague the industry for years to come." Fitch said the radio industry "is likely to be flat to down slightly" and outdoor advertising "which typically lags, should begin a slow recovery later in the year."
Both cable TV networks and broadcasters in large markets are "poised to participate in a potentially modest rebound," Fitch said.