Cautious optimism is in the air among station owners, brokers, and yes even the few bankers who are present at the NAB Show in Las Vegas, although the latter are in a very low profile mode. Some brokers report that they have reached agreement on pricing between buyers and sellers, but the outside capital in the form of bank loans continues to be scarce.
However, there may be hope on the horizon, according to Dave Schutz, President of Hoffman-Schutz Media Capital: “I have participated in two meetings with senior lending officers of regional banks that have previously not been engaged with the broadcast industry. They have heard of the dearth of lending by traditional lenders and are at NAB to learn more about the industry. They are also trying to gauge interest to the relatively conservative loan structures they might be able to offer. The importance is some banks are at least talking about entering the segment.”
He adds: “Forty years ago, simple bank and finance company lending, without ‘equity kickers’ was nonexistent. But, by the mid-1970s, Aetna Business Credit, led by Barry Dickstein, helped create the standard of pure debt capital for broadcasters that remained in place for another 30 years. Maybe we are seeing the very earliest signs of a renewal of the credit markets in the broadcasting industry.”
The climate is improving, we hear, and we would not be surprised if a couple of deals are announced from the show.
RBR-TVBR observation: Another possible factor in Vegas deal making?: Schutz notes that the Bellagio, for the last 10-15 years has been the place where the financial community, station owners and NAB Board have stayed and done business. That place now is Steve Wynn’s newest hotel, the Encore. The Bellagio lobby, he says, is now a major tourist destination with its conservatory and indoor garden. It’s very busy there. The standing comment from most at the deal-making meetings is that the Encore lobby only seems to have owners, attorneys, financial executives and station owners/management. Schutz says it’s the “best single location yet invented to meet, greet and do business…and in some respects, it’s better than a suite.”
RBR-TVBR note: For more on the fast-changing world of broadcast financing and deal making, you’ll want to check out the 6th Annual RBR-TVBR Financial Roundtable, coming in the next issue of Manager’s Business Report. Click here to opt-in.
6th Annual RBR-TVBR Financial Roundtable
The world of broadcast financing is changing rapidly as M&A activity is finally picking up in 2011. Our expert panelists provide illumination of the latest trends and make some predictions in this annual update. You won’t find a more informed group:Key participants in the 6th Annual RBR-TVBR Financial Roundtable are:
Jack Messmer, Executive Editor, RBR-TVBR
Bishop Cheen, Managing Director, Wells Fargo Securities
Kristin Allen, Managing Director, Credit Suisse
David Abraham, Managing Director, DAC Media Capital
Drew Marcus, Managing Partner and Portfolio Manager, Sugarloaf Rock Capital
Manager’s Business Report. Click here to opt-in.