Although deal volume for the radio and TV station industry is sharply lower so far this year, pricing multiples for these deals remain stable.
According to SNL Kagan, multiples for TV station acquisition deals have been hovering around eight times cash flow (earnings before interest, taxes, depreciation and amortization) for television stations -- and around six to seven times for radio -- for the last two-and-a-half years.
These numbers are about half the levels -- mid-double-digit
multiples -- that were seen in the 1990s and early 2000s.
For the first quarter of 2015, SNL Kagan says, the volume of merger and acquisition deals declined by a massive 76% to $184.9 million from the fourth quarter of 2014, which was at $778.1 million. Radio was the big deal-maker during the first three months of 2015 -- pulling in $147.8 million -- while TV station deals amounted to $37 million.
A major TV deal during this period was Gray Television's acquisition of KMVT/KSVT from Neuhoff Communications for $17.5 million. A major radio deal in January was Alpha Media's purchase of three FM stations from Coast Radio Company for $11.15 million.
Over the past two years, the TV station industry has seen consolidation with major deals among the big TV groups, such as Tribune Media and Gannett. This helped to raise TV station deal volume to $7.3 billion in 2014 and $11.4 billion in 2013. In 2012, it was at $2.1 billion in 2012, and $1.2 billion in 2011.