Moody's: recession mixed for U.S. media

If the U.S. economy were to slip into recession in the next two years, some U.S. media and entertainment companies would stand up relatively well while others would see their debt ratings become more vulnerable, according to a new report by Moody's Investors Service.

Of the sector's 22 investment-grade credits, the companies showing the greatest potential rating vulnerability to an economic downturn include the New York Times Co. (Baa1), Clear Channel Communications, Inc. (Baa3), Gannett Co., Inc. (A3) and Belo Corp. (Baa3), according to Moody's.

In contrast, Viacom Inc. (Baa3), Comcast Corp. (Baa2), Time Warner Cable, Inc. (Baa2) and Cox Communications, Inc. (Baa3) show the least potential for rating vulnerability in a recession, the study said.

"We want to highlight varying degrees of rating vulnerability should recent disruptions in the U.S. housing, subprime mortgage, and credit markets begin to more broadly affect job creation, consumer confidence and overall economic activity," Moody's senior vice president Neil Begley, a co-author of the report, said in a written statement.

"Such a contagion could negatively affect revenue at rated firms because of exposure to economically sensitive consumer and business spending, particularly print and broadcast advertising," Begley said.

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