Kagan Research: A Good Year For TV Stations

The TV station advertising market may be suffering this year, but that hasn't been the case with station sales.

Kagan Research says after a two-year slump, sales from TV stations through September 2005 have more than doubled the sales volume of the two previous years to $2.75 billion. Through a comparable time period, the total for 2003 was $1 billion, and for 2004, $1.2 billion.

Kagan expects that when all is said and done, 2005 will top $3 billion--marking the highest levels seen since 2002. In addition, station deals are getting high double-digit cash flow multiples.

Emmis Communications has been one prime example of overachieving TV deals. Emmis will easily get $1.3 billion in overall sales for its 16-station TV group. Kagan Research says that easily topped analysts' expectations of $1.1 billion.

On the advertising front, Kagan projects that TV station revenues will grow 6.9 percent in 2006 to $23.3 billion, which it says is a customary percentage hike that follows an off year--2005--where there is little to no political advertising and no Olympics advertising.



In the years that follow, Kagan conservatively says average annual growth will be 2.3 percent, to $27.5 billion by 2015.

Weeks ago, the Television Bureau of Advertising estimated that in 2006, TV spot advertising revenues would climb between 6.1 percent and 7.9 percent over 2005. But this mark is at a lower rate than for other political/Olympic years.

Actual gains of the last political/Olympic year--2004--saw TV spot revenue climb 10.1 percent. Other Olympic years also saw double-digit increases--11.9 percent in 2002, and 11.3 percent in 2000.

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