Media Wonk

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Look out below - September 29, 2008

Ad Age reports this morning that the top 100 media companies posted the slowest rate of growth in six years in 2007. Wait to they tally 2008. Now that the House of Representatives have voted down the $700 billion Wall Street bailout/economic rescue bill we're apparently staring at the possibility of a severe economic slowdown as credit and money markets dry up, which obviously won't help anyone's growth rate. In the immediate aftermath of the vote the Dow Jones average plunged more than 500 600 700 points. Take a gander at our Yahoo Finance widget on the lower right side of our home page and you'll see a lot of downward-facing red arrows. The fingerpointing in Washington is now well underway.

By themselves, falling share prices don't necessarily mean falling profits. But for a lot of companies, including media companies, the inability to access short term credit will, even if consumer demand remains stable, which is unlikely in any case, especially if you're trying to sell them expensive new electronics gadgets. Digital media startups are also likely to find it difficult to raise capital.

It's possible that Congress and the White House will come up with a new bailout plan quickly. It's also possible that predictions by the Treasury Department and the Federal Reserve will turn out to be wrong, and credit markets will right themselves naturally.

But in the meantime, better go back and look at those second-half projections.

Yipes.
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