Rupert puts primo properties on the block

There may have already been a lot of television station inventory up for sale, but the nine stations that Rupert Murdoch has decided to divest from the News Corporation portfolio are definitely primo and will attract lots of attention from private equity groups seeking a strong base for a new group - or possibly expansion of an existing one. Based on 2006 revenue estimates from BIAfn, the nine stations, all carrying the Fox network, raked in 347.8 million. We know that the Fox O&O group generally has strong broadcast cash flow margins, so if we figure 45% margins, that's 156.5 million in BCF. If we assume the bidding starts around 12-13 times, that's a total price tag that might push past two billion.

Fox Television Stations Group divestitures

CALLS	Ch.	Market	Rank	Rev. 2006 (000)
WJW-TV	8	Cleveland-Akron, OH	17	72400
KDVR-TV	31	Denver, CO	18	44900
KTVI-TV	2	St. Louis, MO	21	39000
WDAF-TV	4	Kansas City, KS-MO	31	42900
WITI-TV	6	Milwaukee, WI	34	34900
KSTU-TV	13	Salt Lake City, UT	35	29200
WBRC-TV	6	Birmingham, AL	40	38500
WHBQ-TV	13	Memphis, TN	44	22000
WGHP-TV	8	Greensboro-High Point-Winston Salem, NC	47	23950
		Total		347750
Source: BIAfn Media Access Pro

Smartmedia observation: News Corporation is not selling stations anywhere that it has duopolies, which explains why market #19, Orlando, is not in the divestiture group. We would not be surprised, though, to see the company entertain bids separately for its two smallest Fox O&Os in Austin, TX (#52) and Gainesville, FL (#162). This might not be an optimal time, though, to try and sell the MyNetworkTV standalone in Baltimore (#24). The other nine MyNet O&Os are all in duops with Fox O&Os. As for the nine primo properties that Allen & Co. is now shopping, we will be surprised if they are not sold as a group - a very impressive group.

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