Television deal making has grown tenfold since a year ago in dollar volume -- but is still way behind pre-recessionary levels.
Media researcher SNL Kagan says TV deals worth $185
million were recorded through the first four months of this year, up from $19 million over the same period a year ago. Fifteen full-power TV stations have been sold through April 30, versus seven a
year ago.
An analysis by SNL Kagan now says the total TV deal volume of $1.16 billion in 2009 seems too high and is not indicative of the strength of the marketplace, since $880 million came
from easy-to-make deals such as debt-for-equity swaps and restructuring deals.
After the recession, TV deal-making slowed to a crawl. In 2010, TV deal volume was at $125 million for the entire
year, with 23 stations changing hands. Typical cash-flow price multiples, which had been in the high teens for 10-plus years before the recession, sank to single-digit percentages -- the first time
since 1995.
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Year-to-date average price deal multiples (price times cash flow) are now 7.4 times for TV stations and 8.2 times for radio stations. The average TV station cash-flow multiple in
2010 was 9.8 times; for 2009, it was 10.0 times.
Looking at all broadcast deal-making -- TV and radio -- total dollar volume also went up around tenfold through the first four months of the year
-- $3.1 billion against $363 million in 2010.
The top TV-related deal was Southeastern Media Acquisition's purchase of Community Newspaper Holdings, Inc. for $73.73 million. Big radio station
deals include a $2.4 billion Cumulus Corp. bid for Citadel Communications and a $505 million Hubbard Broadcasting deal for 18 Bonneville Radio stations.