Entertainment businesses thrive on consumer confidence, but they also carry some of the heaviest balance sheets in the consumer economy. Scale, brands, and diversification can create the appearance of stability, even when leverage quietly defines the real risk profile beneath the surface.

For investors, the key question is not whether the business generates cash, but who ultimately controls it. Strong operations lose much of their appeal if debt absorbs most of the upside. In this case, valuation alone is a poor guide unless it is weighed against balance-sheet constraints and refinancing risk.

Top points of the analysis

• The operating business is stable, diversified and generates high EBITDA over the long term.

• Extreme financial leverage and a weak balance sheet remain key issues.

• The low market valuation primarily reflects debt, not the collapse of operations.

• Any fall in rates or improvement in refinancing could lead to a significant revaluation

• Investment is a test of patience rather than a…