Thursday, July 6, 2017
SNL Kagan: KPWR Is Q2's Biggest Radio Deal
On May 8, Sinclair Broadcast Group Inc. announced a successful bid for Tribune Media Co. The $43.50-per-share price represents $3.94 billion in cash and equity and the assumption of approximately $2.70 billion in net debt.
As far as the broadcast assets are concerned, at a 7.5x 2017-‘18 average seller's cash flow multiple, we estimate the value of Tribune’s 44 TV stations, including three stations operated through Local Marketing Agreements (LMAs), at $3.76 billion.
The purchase also included one AM radio station and the programming of one FM station, bringing the total broadcast value of the transaction to $3.82 billion.
In addition to the mega-deal, the TV deal market registered transactions worth $403.0 million. The second-largest TV deal of the quarter again involved Sinclair, which on April 21 announced the acquisition of Bonten Media Group Inc. and its 17 full-power and five low-power TV stations, including five LMAs, for $240.0 million.
In the third-largest full-power TV transaction, Saga Communications Inc. left the TV industry, selling its six remaining owned-and-operated stations and three LMAs to Morgan Murphy Media for $66.6 million. At the same time, Saga expanded its radio business with the third-largest radio deal of the quarter, paying $23.0 million to Apex Media Corp. for seven FM stations, one AM and four translators.
The top radio deal was the $82.8 million sale of hip-hop FM station KPWR-Los Angeles from Emmis Communications to Meruelo Media. The transaction was the largest single radio-station sale since 2012 and represents nearly 34% of the quarter’s $245.0 million radio deal total.
The second-largest radio transaction was the radio portion of Sinclair’s Tribune Media acquisition. We estimate a value of $58.4 million for Chicago’s WGN-AM and the programming of one additional FM station.
In the first half of 2017, the broadcast deal market registered a total volume of $7.24 billion, with $4.39 billion coming from the TV sector and $2.84 billion stemming from the radio market.
Posted 4:26:00 AM