Local TV station M&A slows after banner year
Michelle Clancy
There has been on-going consolidation among local TV affiliates in the United States, but there are signs that the buying frenzy is dying down. According to SNL Kagan, total broadcast station M&A volume reached $1.85 billion in Q2 2014, more than $2 billion less than the year prior, when a staggering $3.88 billion of broadcast stations traded hands.

TV station deal volume in the quarter was $1.33 billion, versus $518.6 million worth of radio station deals, which SNL Kagan noted was still a "very robust" deal market despite the decline from last year's huge totals.

On a year-to-date basis through Q2 2014, broadcast deal volume rose to $5.44 billion versus $6.56 billion in H1 2013. A total of 613 stations traded in 2014 YTD, of which 449 were radio and 164 were TV stations. The average TV station price in H1 was $46.5 million, versus $2.3 million for the average radio station.

"The pace of consolidation slowed in the TV station market, no doubt affected by recent FCC regulatory moves," the firm said. "In the largest TV transaction of the quarter, Twenty-First Century Fox traded its owned-and-operated affiliates in Boston and Memphis for Cox Enterprises' FOX affiliate in San Francisco, together with an independent station in the same market. At 8x forward cash flow, we estimate each side of this transaction being worth $429.7 million."

The largest non-swap deal was Gannett Co.'s $215 million acquisition of six stations from London Broadcasting Company, Inc. The average TV station forward seller's deal multiple YTD stands at 8.8x.