In response to the slowing U.S. economy, Goldman Sachs downgraded the media sector from "neutral" to "cautious."
As a result, shares across the sector fell, with the biggest drops coming from Viacom Inc. (VIA-B) which dropped by 4.05 percent to $38.38 and Warner Music Group (WMG) which plunged by 5.07 percent to finish at $11.43.
"The higher cost of debt and stricter credit terms have and will continue to drive adverse behavioral changes, resulting in not only a slower-than-expected economic and advertising growth environment, but also less financial maneuvering to add shareholder value," Goldman's analysts wrote in a note to clients.
In the note Goldman added stocks to especially be cautious of in the sector would be those with the "greatest advertising exposure, limited international revenue, and that have benefited most from nonoperating levers/factors, such as CBS (CBS-A)."
Problems connected to some of the media companies with high levels of debt are as standards continue to tighten, some companies will have problems raising money, while the costs of paying off their existing debt increases.
Those with multi-platforms and a variety of revenue streams should hold fairly strongly. Another key factor is how strong their international presence and revenue is.
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