• by David Goetzl  @dgoetzl, May 21, 2007

The local station business continues to be transformed by the possibility of height-of-the-market valuations. The LIN TV 29-station group just became the second in two days to explore a sale.

The publicly traded company said Friday it has hired JP Morgan to advise on a potential sale. No doubt the move is intended to test its allure among private-equity firms that have shown a heightened interest in the station business. Station groups may feel their value has peaked and face an uncertain future. Consumers continue to migrate to the Web for news and information, and local newscasts account for a major portion of a station's revenue.

LIN's possible sale follows Nexstar Broadcasting's hiring Goldman Sachs for a similar purpose the previous day. But LIN is a bigger fish--operating stations in the top 50 markets, including the CBS affiliate in Indianapolis, an NBC/Fox duopoly in Norfolk, Va., a CBS/Fox duopoly in Providence, and several other large-market duopolies, plus holding a 20% stake in NBC's owned-and-operated stations in Dallas and San Diego.

The company said it expects to pull in $363 million in ad revenue this year--down $10 million from 2006, which was helped by election dollars. LIN had a net income of $21 million in the just-completed first quarter, aided by the sale of operations in Puerto Rico.

Next year, it could reap the benefits of ad dollars from the presidential race, with Columbus, Toledo and Dayton stations in the heavy battleground of Ohio.

Nexstar and LIN purchases by private-equity operations would continue a trend. The 56-station Clear Channel group was sold to Providence Equity Partners for $1.2 billion, the New York Times Co.'s nine stations sold for $575 million last year, and a wealthy real-estate entrepreneur is taking the Tribune Co. private with its big-market stations.

Shares of LIN were up in the 13% range in mid-day trading Friday to a 52-week high of $19.