Millions spent on TV spectrum speculation


Pile of Money
There has been a cottage industry within the station trading universe during the past couple of years – the buying and selling of lower-profile television stations. According to a new study from SNL Kagan, several hundred million dollars may have been invested in advance of incentive auctions in the television space.

According to Kagan, it appears that 14 full-power and 25 Class A television stations have been acquired with an eye on the auctions. The incentive portion of the auction is the offer that licensees willing to participate will get to share in the income generated.

SNL Kagan tallies $344.8M spent on such stations since 2011.

The big spender has been NRJ TV, which has invested $234.2M. OTA Broadcasting has invested $52.8M. Both have spent on full powers. Recent entrant as a possible speculator is Locus Point, which snapped up Class As toward the end of 2012.

RBR-TVBR observation: The FCC will be glad to know there will be some inventory for its auctioneers to peddle. However, most television groups are reporting record fourth quarter revenue results and very healthy returns for 2012 as a whole. Sure, the elections fueled much of the growth, but last we heard is that they’re going to have another one in 2014. On top of that, the automotive industry is gaining strength, and when that happens, it is another positive for broadcasters.

Suffice it to say that broadcast television remains a vibrant medium, and the groups established in the business with network affiliations and strong local news departments are not likely to be participating in any auctions.