SNL Kagan Study Shows a Major Rally in TV Station Stocks
Strong private equity interest, high cash flow margins, new revenues, solid valuations and political windfalls drive a white-hot TV deal market.
Monterey, Ca. (May 30, 2007) —TV Station Deals & Finance, a new report by SNL Kagan, shows that this is one of the hottest years since 1999 for TV station deals, values and revenue outlook. TV station assets are in high demand, with a growing buyer pool eager to take part in the industry. Solid multiples are being paid for properties due to heightened expectations for revenue growth from new sources such as retransmission consent and the Internet, strong political ad spending, ample availability of capital, the roll-out of HDTV signals, declining debt levels and media-leading cash flow margins.
SNL Kagan's TV Station Index year-to-date is up 25%, on top of a 16% increase in fourth-quarter 2006. Deal volume for 2006-2007 is at historic levels, with solid multiples being paid for station assets. Year-to-date TV station deals for 2007 have averaged a 12.9x year-ahead cash flow multiple with almost $1 billion worth of deals done through March 31, after deal volume of almost $9 billion in 2006. The rest of 2007 is shaping up to be just as active, with continued strong interest both from strategic players and financial buyers bolstered by a flow of properties coming to take advantage of the frothy deal market.
"Private equity interest and the availability of capital has created a solid floor for deal multiples," said Michael Buckley, analyst for SNL Kagan. "We expect 2007 to be an active deal market as more broadcasters — such as Nexstar and LIN TV — look at privatization options."
The TV Station Deals & Finance Report provides exclusive projections for the industry, including new revenue streams, comprehensive TV station deal data and metrics and contacts for financial sources. It also details the money markets and financings in the industry, documenting the influx of new money by private equity investors and providing insight into bank lending, the bond markets and other broadcast capitalizations.
TV Station Deals & Finance is available exclusively as a part of the SNL Kagan Information Service. For more information on the report and other media & communications datasets within the SNL Kagan Information Service, call 866.296.3743 or email: SNLKaganSales@snl.com .
About SNL Kagan
SNL Kagan is the ultimate resource for complete financial intelligence on the broad and dynamic media & communications sector, including the broadcasting, cable, entertainment, motion picture, telecom, wireless, satellite, publishing and new media industries. The SNL Kagan suite of products integrates breaking news, comprehensive data and expert analysis into an electronic database that is available online and updated around the clock. SNL Kagan combines the 38-year heritage of Kagan Research with parent company SNL Financial's 20 years of experience in providing essential guidance to Wall Street and to America's top corporations. For more information, visit www.SNL.com or www.Kagan.com .