Thursday, January 5, 2017
2016 Saw Slowest Market For Radio Deals In Three Decades
Radio deal volume in fiscal year 2016 reached $522.6 million, which is the lowest year on record going back to 1982.
In the fourth quarter of 2016, 92% of the U.S. broadcast station deal volume ($96.2 million) came from radio deals. Due to the ongoing FCC quiet period on TV transactions as a result of the ongoing spectrum auction, the TV deal market registered a mere $8.2 million.
The top deal of the fourth quarter (and the second-largest deal of the year) came in the wake of the Beasley/Greater Media merger. In August, Beasley Broadcast Group, Inc. placed three stations it bought in the Charlotte-Gastonia-Rock Hill, N.C. market in a trust to comply with FCC regulations. In October, Beasley sold the stations WLNK-FM and WBT-AM/FM, together with WFNZ-FM and an FM translator, to Entercom Communications Corp. for $24.0 million, equating to a 6.0x cash flow multiple. In the absence of any other large deals, Beasley became not only the year's top buyer but also the top seller by deal volume.
The fourth quarter of 2016 also brought the year's largest single-station deal, which involved the same station as had the year's top-ranked single-station deal at the time. KFWB in Los Angeles changed hands for the second time this year, delivering a $3.2 million profit to short-time owner Universal Media Access, which in February paid $8.0 million for the station, intending to keep it, but could not refuse Lotus Communications’ $11.2 million offer.
Following the FCC’s AM Revitalization Act, the U.S. deal market experienced a surge of sales of FM translators. In total, 489 FM translators and 447 translator construction permits sold for $31.9 million and $16.7 million, respectively. The total number of 936 translator stations and permits, more than twice as high as in 2015 (458), stands for 65% of all radio stations and permits sold in 2016.
In spite of the FCC Incentive Auction quiet period on TV station transactions, Northern Lights Media, Inc., a unit of Gray Television, Inc., announced the acquisition of a trio of TV stations in America’s northernmost market, Fairbanks, Alaska, paying $8.0 million (a 7.0x cash flow multiple) to owner/operator partners Tanana Valley Television Co. and Chena Broadcasting LLC.
In the wake of the $4.6 billion merger of Nexstar Broadcasting Group, Inc. and Media General, Inc., the TV market closes the year with a total of $5.30 billion, 87% of which stems from just one deal.
Posted 4:43:00 AM