There’s no getting around this bruising bit of data from S&P Global Market Intelligence-owned media research group Kagan: U.S. broadcast station mergers and acquisitions volume reached $189.6 million in Q3 2017.
This is the lowest quarterly deal volume of the year. But, the previous two quarters were skewed by two billion-dollar deals.
Still, Kagan did its best to put the terrible climate for media property trades in a positive perspective: The volume of deals seen in Q3 remains higher than that of Q4 2016 volume, when some $116.1 million in deals were seen — and that of seven other quarters since 2008.
In Q3, some $123 million is attributed to radio station sales, with nearly 50% attributable to the sector’s top deal.
FIRST ENTERCOM SPINS TOP THE Q3 DEALS
In the absence of bigger commercial deals, the largest radio deal of the quarter was announced on Sept. 26. That deal saw Educational Media Foundation pay $57.75 million (or $3.75 per person in each of the three markets, consolidated) for KSWD-FM 100.3 in Los Angeles, KSOQ-FM 92.1 in North County San Diego, and WGGI-FM 95.9 in Benton, Pa., from Entercom.
If not for these spins tied to Entercom’s Reverse Morris Trust-fueled merger with CBS Radio, the biggest deal in Q3 would have been the sale of 4 AM and 14 FM stations, along with two FM translators, to Dick Broadcasting Co. by Alpha Media. This deal was announced on Sept. 5.
Otherwise, Kagan notes that in Q3 there were 10 other radio station transactions valued between $1 million and $7 million. All others were less than $1 million in value.
ENTRAVISION BUY IN GOLDEN STATE TOPS TV DEALS
In the top TV deal of the quarter, announced July 21, OTA Broadcasting (PSP) LLC sold its two stations in the Palm Springs, Calif., market to Entravision Communications for $21 million. “We estimate a 7.5x forward seller’s multiple, while Entravision reported a buyer’s multiple of less than 6.5x,” Kagan notes.
In the final days of August, the parent company of a home shopping channel agreed to sell its full-power digital TV station serving Boston. At the same time, a channel-sharing agreement (CSA) was forged by the buyer to allow a company that collected millions in the recently concluded FCC incentive auction to use one-third of this digital station’s spectrum.
The asset purchase agreement and CSA recitals have finally found their way to the FCC via a Form 314 filing made Thursday (Oct. 5).
The seller is EVINE, which along with co-licensees Norwell Television LLC and ValueVision Media Acquisitions is divesting WWDP-46 in Norwell, Mass., to WRNN-TV Associates for $10 million. This was the No. 2 deal by dollar amount for the entire quarter, based on its consummation date.
Another big TV deal of note, first reported by RBR+TVBR, sees a close partner of Sinclair Broadcast Group agreeing to purchase an unaffiliated UHF station in Dallas that failed to fetch any bids in the FCC’s recent Spectrum Auction.
The station being sold is KTXD-47, licensed to Greenville, Tex., and serving the Dallas-Fort Worth market. The sale marks the end of the road for London Broadcasting, with the buyer cozy Sinclair player Cunningham Broadcasting.
Cunningham paid 9.5 million for KTXD; some 90% of Cunningham stock is controlled by trusts in the name of Sinclair founder Julian Smith‘s children.
Then, there is the transaction in Los Angeles involving the biggest Azteca América station in the U.S., as Southern California License LLC in early September agreed to sell KAZA-TV, licensed to the island municipality of Avalon, Calif., to TV-49 Inc. for $9 million.
It’s a “zombie station” deal, as KAZA in April sold its spectrum in the FCC’s Incentive Auction and entered a channel-sharing agreement with KHTV-CD, a Class A station in Los Angeles at Channel 27.
This CSA went into effect on Aug. 25, and that’s what’s being handed to TV-49, an entity tied to Norman Shapiro’s Weigel Broadcasting Co. MeTV VP Evan Fieldman signed off on the asset purchase agreement, FCC documents show.
Weigel is the company behind the digital multicast networks MeTV, a partnership with MGM; and MOVIES!, run in partnership with FOX Television Stations.
All other TV deals in Q3 registered $6 million each or less, bringing the total quarterly TV deal volume to $66.6 million.