• by David Goetzl  @dgoetzl, May 19, 2010

The M&A market for TV stations -- which was robust before the economic slowdown and then virtually nonexistent -- looks to be positioned for a fast recovery, according to Meredith Corp. CEO Stephen Lacy.

"I think those TV assets are going to be hot," he said at an analyst conference Wednesday.

Lacy said that pre-recession, stations were selling for multiples of about 15 X EBITDA, which was not sustainable for Meredith. Private-equity firms helped drive the costs up. Valuations now should be slightly lower, he indicated.

"Before the downturn those multiples were very heady; they were in the mid-teens," Lacy said. "And every time we would bid on something as an owner-operator -- as opposed to somebody who's doing a roll-up to flip it -- we really can't make those kinds of numbers work."

It is unclear how interested Meredith would be in acquiring a TV station now. The company has expressed an interest in media properties in the health arena.

NBC Universal's efforts to sell its Miami and Hartford stations starting in 2008 were unsuccessful. Nexstar put its full business on the block, but canceled the process in 2007, citing tough market conditions.

Lacy noted that the station business has improved lately with auto marketers spending more, while political dollars should be strong this year. "No incumbent is really safe right now, so even people who I think traditionally would not have had to spend much ... probably will," he said.

Such politicians include Sens. John McCain and Harry Reid; both are fighting for political survival in hotly contested races.

In that vein, Meredith is well-positioned to benefit. McCain's bid to hold onto his Senate seat in Arizona should help its CBS Phoenix affiliate, while Senate Majority Leader Reid trying to do the same in Nevada is likely to benefit its Fox affiliate in Las Vegas.

In addition to the cash from candidate dollars, the flood of ads increases prices across the board.

"Equally important, or maybe even more important, is that the underpinnings of the traditional nonpolitical business being up in the mid- to high teens right now ... helps tighten that inventory and allows us to price up significantly," Lacy said.