In an interview with the paper ahead of his departure from Merrill Lynch, Blackley said that the only ‘crumb of comfort’ is that the rates of decline have been moderating in the last couple of months. Nevertheless, his team does not see this as a turning point for the industry.
The warning is that there is likely to be the much-feared ‘double-dip’ in the markets as consumers stop spending money. The ratio of debt to earnings is now very high and house prices are teetering at a peak and are likely to fall. These factors are likely to curtail consumer spending, which has so far been the primary prop holding up the economy. When consumer confidence does fail, a second economic (and therefore media) dip is expected (see UK Economic Prospects Tougher Than Forecasts Suggest, Says Deloitte Report).
Blackley has decided to leave his post at the investment bank despite being one of the industry’s most influential and respected forecasters. In a parting analysis of the UK media scene he described ITV as ‘dysfunctional’ and in desperate need of new management and claimed that Five needs a new “tent-pole” programme to follow Home & Away.
He also advised investors to look favourably on radio, pay-TV, directories and professional publishers and to stay away from cable and professional financial services, according to the Times.
