In the 1998 movie Shakespeare in Love, Geoffrey Rush plays the embattled owner of the Globe Theatre and, in one scene, he memorably fails to explain to creditors why his business always seems to be careening towards disaster.
“Allow me to explain about the theatre business,” he says. “The natural condition is one of insurmountable obstacles on the road to imminent disaster.”
The creditor is an unreasonable man who asks a reasonable question: So, what do we do?
“Nothing,” Rush fast-talks. “Strangely enough, it all turns out well.”
That’s what I was thinking about as I looked at Crunchbase and Alignment Growth’s midyear update on the media, entertainment, and gaming industry, which broadly always seems to be barreling towards catastrophe. But MEG, as Crunchbase abbreviates the amalgamated sector, is actually on an upswing in terms of funding and dealmaking. Color me somewhat surprised.
I’d say the numbers are looking pretty good, but not unassailable.
For example: In the first half of 2024, global venture funding into MEG hit $7.1 billion, an increase of 58% when compared to the second half of last year, according to Crunchbase data. That’s also up about 4% year over year. Now, Disney’s $1.5 billion investment into Fortnite maker Epic Games plays a huge part in this increase, but there are other green shoots that Crunchbase identifies, like a 15% pickup of venture MEG activity in Asia as compared to the latter half of 2023.
Next consider M&A activity: Globally, M&A activity across MEG has seen dollar volume increase 100% year over year, and is up by 2x from the first half of 2023. A lot of this is accounted for by take-privates, at least on the billion-dollar deal side, including Silver Lake’s $25 billion buyout of Ari Emmanuel-led Endeavor and EQT’s $2.8 billion purchase of Keywords Studios. Permira’s nearly $7 billion take-private of Squarespace also fits into this category. I’m not going to sit here and tell you that I see a take-private as a great sign for the health of a sector, but if deals are getting done, the assets still matter.
I never know how to feel or think about these Frankensteined sectors. (This isn’t just Crunchbase’s MEG, by the way—TMT has also always struck me as a suboptimal grouping.) Putting Disney in the same bucket as sports deals or, cough, news businesses has always struck me as simultaneously ill-fitting and apt. After all, Disney has done some of the most famous sports deals there have ever been (looking at you, ESPN), and a huge part of the Warner Brothers Discovery story has been CNN. But do all media, entertainment, and gaming companies have the same challenges? Should they all be bucketed together? Depends on how you look at it, I suppose. I’m perhaps just reminded of how we can sometimes talk about sectors as monoliths, without accounting for the massive variation within.
And regardless, it’s hard to deny that the data coming into this year across MEG looked rather bleak. Peering back at Crunchbase’s 2023-focused report, the data company calculated that, of the 191,000 tech layoffs tracked in 2023, 45,000 of those lost jobs were at MEG companies. The report at the time also showed that global venture funding in the sector dropped 62% in 2023, after dropping 22% in 2022.
So, all of this to say: Things appear to be looking up for MEG. Which has always sort of been the nature of the business—at least if Shakespeare in Love is to be believed.
In the movie, after Geoffrey Rush’s frenetic theatre owner assures his blustery creditor that all will turn out well, the creditor, again, has a very reasonable question: How?
“I don’t know,” Rush says. “It’s a mystery.”
See you tomorrow,
Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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