EY logoThe adage about a rising tide lifting all boats doesn’t seem to apply to media and entertainment. Only 21% of 61 industry execs surveyed in March said they expect to create jobs or hire talent in the next 12 months — “down significantly” from a year ago when 44% planned to do so — advisory firm Ernst & Young says today in its latest Capital Confidence Barometer. Even worse, 21% now say that they plan to “reduce workforce numbers,” up from 13% last year.

That might make sense if they were pessimistic about the economy. But the survey shows just the opposite: 64% say the global economy is improving, up from 59% last year. What’s more, they’re confident about their ability to secure credit (52% vs 36% last year) and the short term stability of the market (43% vs 39%) — and there’s virtually no change in their optimism about corporate earnings (57% vs 58%) and equity valuations (50% vs 49%).

So what will media chiefs do with their cash? About 34% say that over the next 12 months they plan to make an acquisition — mostly to help their digital transformation — up from 23% last year. In addition, “Some have already taken advantage of historically low interest rates and are paying down debt, while others are returning capital to shareholders,” says Tom Connolly, EY’s global leader for Media & Entertainment Transaction Advisory Services. “Either way, M&E companies are being decisive about how they deploy capital to execute on their corporate strategy.”