LIN TV’s chief said Wednesday that M&A in the local station business is likely to increase with “non-traditional” owners as potential sellers. Recently, Sinclair announced a deal to acquire seven stations from private-equity firm Cerberus, while Newport Television, which is owned partly by Providence Equity, has an impressive portfolio, though it may not be for sale.
“The potential for industry consolidation is greater than ever,” CEO Vincent Sadusky told investors.
He added it “makes a lot of sense,” since larger groups would have more leverage in negotiations with operators, networks and programmers. He did not specify any plans LIN, which operates 32 stations, may have.
Separately, Sadusky said broadcasters have a significant asset with their spectrum, which is coveted by wireless carriers and should continue to be in high demand.
“The spectrum that we’ve got is really the filet mignon of video delivery,” he said.
Sadusky said the National Association of Broadcasters has done a solid job in lobbying efforts to ensure broadcasters are protected -- since the FCC and Congress could move further toward a voluntary auction of spectrum. That would give some station groups the option to collect cash and cease operations. Maintaining spectrum, however, offers opportunities with multicast channels and mobile distribution.
“There’s some more work to be done, but ultimately, I believe for the folks who want to stay in the business -- such as ourselves -- we will continue to be able to do so,” Sadusky said. “Then we’ve got the opportunity to continue to work very hard as an industry to innovate and find incremental compression technologies to be able to utilize less spectrum for our primary channel -- and create new opportunities for the bits outside of our primary service.”
The Open Mobile Video Coalition, where Sadusky is the president, has worked to usher in live streaming of broadcast channels to mobile devices.
Ticking off a list of potential industry drivers, he cited auto and political advertising and retransmission consent dollars. He said he doesn’t mind sharing retrans money that LIN collects with networks, as long as that leads the networks to invest in developing better programming and acquiring sports rights.
Sadusky said digital operations should be a growth driver for LIN going forward, partly as a way to reach people at work, which station groups couldn't do in years past. Also, LIN is moving to launch sites not affiliated with stations, such as a partnership resulting in a site in Austin, Texas, focusing on local culture.
“We think that there’s a terrific opportunity to continue to capture local ad dollars from radio, the yellow pages and print,” he said.