• by Erik Sass , February 2, 2009

The digital out-of-home sphere showed more symptoms of the broader economic crisis last week, with Thomson's announcement on Thursday that it is looking for buyers for Premier Retail Networks, the nation's biggest in-store media network, and a 50% share of Screenvision, one of just two national cinema advertising companies.

The sale of these big properties could signal the beginning of a long-predicted shakeout in the digital out-of-home business.

The details of the two networks' financial performance are not available, but Thomson itself is being squeezed by the global credit crunch, which is hitting European markets hard.

Based in Paris, Thomson has been edging closer to technical default on its substantial debt under the terms of its covenants with lenders. Selling PRN and its share in Screenvision would raise cash to meet upcoming debt payments.

As some of the largest digital out-of-home networks in the country, PRN and Screenvision are at the forefront of a burgeoning medium, which should make them attractive properties. But the same credit crunch that is forcing Thomson to sell may prevent buyers from presenting realistic bids, as banks have locked down large-scale lending.

A survey of 1,500 media executives released in January by AdMedia, a media merger and acquisition advisor, found that most believed mergers and acquisitions would contract sharply in 2009, explaining: "The principal uncertainty in the minds of executives is the future state of the credit markets."

In the third quarter of 2008, the Jordan, Edmiston Group, which handles a variety of M&A transactions involving media companies, said the total value of M&A activity in the first three quarters of 2008 was down 70% compared to the same period in 2007. It dropped from $87.6 billion to $26.7 billion.

] JEG also found that "billion dollar-plus leverage transactions have largely gone on hold."