Radio M&A Has Lowest Quarter in 34 Years


Broadcast-deal-Volume-RadioU.S. broadcast station M&A reached $728.9 million in the second quarter, but radio made up only $47.8 million of that total, the lowest radio deal volume in a quarter in 34 years. Radio deal levels haven’t been this low since 1982, according to SNL Kagan.

But to put this news in perspective, much of the deal volume was generated by the pending Nexstar-Media General merger and required spinoffs. Deal-makers have also been focused on the FCC television incentive auction.

Excluding construction permits and partial deals, first half 2016 radio deal volume reached $133.2 million with 223 full-power stations and 300 low-power stations sold.

The largest radio deal in Q2 was the $5.9 million sale of four FMs in Fort Walton Beach, Florida from Apex Media to Community Broadcasters. SNL Kagan estimates a 7.5x forward seller’s multiple for the deal.

And the amount is low. The last quarter without at least one radio transaction worth $10 million or more was the second quarter of 2010.

Two deals in the quarter topped $2 million: Garrison City Radio Group LLC sold WBYY-FM and WTSN-AM in New Hampshire’s small (rank 123) Portsmouth-Dover-Rochester market to WBIN Media Co., and Toccoa Falls College Inc. sold three FM stations, one AM station and two translators — placed near the border tripoint of Georgia and North and South Carolina — to Radio Training Network Inc.

Just like the first quarter, much of radio’s deal volume (some 59%) involved FM translators. 186 FM translators (including 100 construction permits) were sold in the second quarter for a total of $9.1 million. That compares to 447 translators sold in Q1, adding up to $18.0 million.

Broadcast-deal-Volume-TVTV station deal volume in the first half of 2016 totaled $5.29 billion with 96 full-power and 38 low-power stations sold. While the vast majority of the TV station deal volume stems from the Nexstar and Media General merger and its spinoffs, a total of $117.6 million (15 full-power and 35 low-power stations) came from deals activity not involving either one of the merger parties.

The TV deal market registered $681.2 million, 80% of which came from spinoffs initiated by Nexstar Broadcasting Group Inc. to comply with FCC regulations impacting its Media General Inc. acquisition. To get under the ownership cap, Nexstar sold 12 stations to 5 different buyers. The largest of the deals, and the top TV transaction of the quarter, was the $270 million sale of KWQC (NBC / Davenport, Iowa) and WBAY (ABC / Green Bay, Wisc.) to Gray Television.

Six of the stations sold by Nexstar are technically still owned by Media General, but Nexstar made the announcement as the seller, with the transactions expected to close soon after approval and closing of its Media General acquisition. Nexstar reported an average 11.1x trailing seller’s multiple for the spinoffs. SNL Kagan estimates that translates to a forward (2016/17) multiple of 10.0x.

The second quarter’s largest TV deal not involving Nexstar was the TV industry exit of Calkins Media Inc., which sold its three TV stations for $82.0 million to Raycom Media Inc. and American Spirit Media LLC. Due to the auction quiet period initiated by the FCC on January 12, this deal will not receive FCC approval before the end of the spectrum incentive auction.