Look for the sale of Lincoln Financial Media (6/8/07 TVBR #112) to bring 1.3-1.6 billion, says Bear Stearns analyst Victor Miller, which is right in line with our quick call of 1.5 billion. He's projecting the three TV stations in markets 26, 61 and 100 will command multiples of 11-13.5 times EBITDA and the 18 radio stations in five markets ranked 9-33 to go for 12-14 times. That would put the TV price tag at 440-540 million and radio at 900 million to 1.05 billion.
Who are the bidders? In radio he notes that Cox Radio and Beasley both line up well with the LFM markets and Entercom has been a good acquirer of radio properties. He notes, though, that Cox has traditionally note been an aggressive bidder. "Private equity will likely be active," said Miller, in what could well be an understatement. For TV, he notes that there has been a lot of activity lately, with Clear Channel and the New York Times Company both selling their entire TV groups, while Nexstar and LIN are now up for sale as well.
SmartMedia observation: We keep hearing a lot of talk about Cox Radio, but it has a crossownership barrier with the Atlanta Journal-Constitution in the biggest radio market. Also, if it teams with Cox Broadcasting, both controlled by Cox Enterprises, to bid for the whole thing, a divestiture would also be required in the largest TV market, Charlotte. So we'd like to throw another name into the mix – Local TV LLC, where Randy Michaels is champing at the bit to launch Local Radio LLC as well. Financial backer Oak Hill Capital has plenty of dry power to buy all of Lincoln Financial Media. The three TVs fit right into Local TV's existing platform, three more fast-growing Southeast markets. And the radio group is all primo, including three of Randy's favorite markets dating back to Jacor days-Atlanta, San Diego and Denver.