On Financial Risk Management And Control Of Media Enterprises' PremiumMergers And Acquisitions

In response to the impact of the Internet and new media,more and more traditional media companies are forced to survive and compete with the pressure to choose to achieve business transformation through mergers and acquisitions,so the media industry has also set off a boom in M&A.Due to the attributes and characteristics of “light assets” of media companies,high-value M&A have become “new normal”,but there are certain potential risks behind premium M&A,which are worth exploring and analyzing.This paper first reviews the domestic and foreign literatures on the financial risks of M&A.And this paper finds out that the existing literature research on premium M&A mainly focuses on the theoretical basis of M&A premium and its influencing factors and the economic consequences of the merger and acquisition of the premium.At the same time,the financial risks of M&A are divided into four basic types: target enterprise value assessment risk or transaction pricing risk,financing risk,payment risk and financial integration risk,but there are few literatures on the financial risk arising from premium M&A.Secondly,this paper expounds the concept and classification of M&A premium and M&A financial risk,summarizes the theory of premium M&A,and clarifies the impact path of financial risk of M&A.Thirdly,this paper takes the characteristics of high-price M&A in the media industry as the starting point,analyzes the overall development status and prospects of the industry,summarizes the development history of M&A in the media industry,and summarizes the characteristics of M&A transactions in the industry according to the data.On this basis,this paper selects the traditional newspaper group in the media industry,Guangdong Media,to acquire the outdoor LED large-screen media company Advision Media as a case to sort out the M&A process,and analyze and conclude that the purpose of the M&A in Guangdong Media includes meeting development opportunities and creating Marketing advertising platform,accelerate industrial integration,bring into play all-round synergy,enhance the company's strength,maximize shareholder's interests,etc.;the reasons for the formation of M&A premium mainly include the interests of the acquirer,the market environment and industry characteristics,and the enterprise value evaluation method.The reason for the formation of financial risks in the process of premium M&A is that due to the false information provided by the target company,there is a serious information asymmetry between the two parties.The high price of Guangdong Media's acquisition of the company's behavior has led to serious valuation risks.With the risk of goodwill impairment and brought a certain financing payment risk and financial integration risk to the enterprise,when the problem of Advison Media broke out,the risk has been out of control,and the merger ended in failure.Finally,based on the results of the case study,this paper proposes management and control recommendations for the premium financial risks generated by the media industry in M&A.Starting from the internal level of the company,the recommendations are as follows: first,clear positioning,avoid blind diversification and merger;second,pay attention to the best,choose the right target company;third,reasonable valuation,enhance the ability of M&A;fourth,strengthen management to improve the efficiency of M&A.At the same time,this paper puts forward the management and control suggestions from the perspective of intermediaries: First,gradually improve the cultural assets assessment system;second,improve the intermediary agency service functions.Finally,the article proposes that government regulators should increase supervision to maintain the healthy development of the capital market and industry.