U.S. broadcast station mergers and acquisitions volume reached $2.76 billion in the first quarter of 2017, according to research firm Kagan.
But Kagan, a media research group within S&P Global Market Intelligence, points out that radio broadcast deals accounted for $2.59 billion of that. In particular, most of that M&A money was part of CBS’ blockbuster merger with Entercom.
“At a 7.0x forward seller's multiple, the 29 AM and 88 FM stations account for $2.50 billion, making this the largest radio transaction since 2006,” wrote Kagan, adding that another $92.9 million was paid for 61 AM stations, 60 FM stations and 44 low-power stations.
For the first quarter of 2017, broadcast TV deals have been relatively quiet. Gray Television announced it was spending $85 million on two stations in Florida and Maine, and Meredith revealed it was buying Turner’s Atlanta station for $70 million.
But that quiet period for TV broadcast M&A is not likely to last long this year.
Sinclair is reportedly looking to buy Tribune Media’s assets, and broadcasters like CBS and Nexstar Media are both gearing up to buy more broadcast stations.
“We do anticipate there will be deregulatory activity … as we roll through the year,” said Nexstar Media CEO Perry Sook, according to a Seeking Alpha transcript. “Some things will happen sooner than others. We're optimistic that the UHF discount will be reinstated and then an NPRM issued to discuss all ownership rules, both local and national that the FCC I think will work through.”
Sure enough, FCC Chairman Ajit Pai has moved to reinstate the UHF discount, which would relax TV station ownership rules for broadcasters.
Last year, the FCC changed the UHF discount governing ownership rules for broadcast stations so that UHF stations would now have to count 100% of their reach toward the cap, instead of the previous 50%.
Since that time, broadcasters like CBS have urged the FCC to reinstate the UHF discount before making any further reforms on the ownership rules that currently cap a broadcast station group’s national audience reach at 39%.