Research form respected industry analyst SNL Kagan has indicated that TV companies have put behind a tough 2011 and are in a phase of recovery for 2011.
Evidence for this is provided by the analystís ongoing investigation of the TV station deal sector which it says has registered an upturn in deals compared to the 2009-2010 period and now shows a TV deal volume of $185 million to 30 April 2011, compared with a paltry $19 million at he same period a year earlier.
The analyst calculates that in total, broadcast deal volume through April 30 is already $37 million higher than full-year 2010.
Despite the optimism that such data generates, SNL Kagan is keen to point out that during the 2009 and 2010 period the deal market was still adversely affected by the financial meltdown of mid-2008. It notes that $880 million of the total TV deal volume of $1,157 million in 2009 originated from debt-for-equity swaps and restructuring deals
Moreover, 2010 registered a further decline in deal volume to just $125 mil; cash flow multiples throughout the entire period were in the single digits for the first time since 1995. The result was tight access to capital for nonperforming stations with additional falls in $/TVHH values. By stark contrast, total broadcast deal volume through April 2011 was said to have reached $3.1 billion compared with the $363 million of 2010. Year-to-date TV average deal multiples are 7.4x those in the previous year. So far this year top 2011, companies including NBC, Nexstar, Liberty Media and Daystar Television Network have been involved in the TV station deal market and in all up to the end of April, 15 Full-Power TV stations had been sold compared with seven by the same period in 2010.
SNL observes though that TV station M&A discourse can be complicated by an upcoming potential spectrum auction in which some TV station spectrum may be sold in order to allocate 120 MHz of TV station spectrum to wireless carriers.