Factors including recently relaxed media ownership rules and tax reform could lead to accelerated broadcast M&A activity in 2018, according to BIA/Kelsey.
Late in 2017, the FCC issued new relaxed regulations concerning local ownership of local television stations, and relaxed regulations surrounding local television-radio and local broadcast-local newspaper ownership.
“While there is some question as to whether some or all of these new regulations will be challenged in the courts, there is some optimism that this relaxation will lead to an increase in station trading activity,” wrote BIA/Kelsey in a blog post.
The firm said another factor driving increased activity was the passage of tax reform late in 2017.
“By lowering the overall corporate tax rate and full expensing of new capital equipment for five years, the values of broadcast properties (much like most other businesses) will most likely increase. This potential positive influence on these values should be taken in context of the longer-term trend of values reflecting the increased competition faced by local radio and television stations,” wrote BIA/Kelsey.
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According to the firm, the total number of television stations sold in 2017 was 107 for a total value of nearly $4.7 billion. For radio, there were 755 stations sold in 2017 for a total value of over $3.3 billion.
The number of television stations sold increased by ten over 2016 but the total value of those stations sold decreased by nearly $600 million.