Planets Align For Station Trading Tsunami
Strap in because the station trading market is about to get extra lively.
First up: Today's the deadline for final bids on Local TV LLC/FoxCo.'s 21 stations. Technically, they are separate groups, but they have common ownership and are likely to go as a single entity.
Their markets range from Denver (DMA 17) to Fort Smith, Ark. (DMA 101), with the majority of the stations in Top-50 markets.
Potential bidders include the usual suspects, namely Sinclair and Nexstar. That said, the Local/FoxCo. stable encompasses markets a bit bigger than Sinclair and Nexstar typically have targeted. But in today's anything-goes environment, it's safer to count those two bidders in.
Meredith also could be a player. In an April 2 interview with the Des Moines Register, Stephen Lacy, CEO of Meredith, expressed interest in acquiring some of the stations.
In the interview, Lacy said: "Owning TV stations has been a fabulous model for us. It generates tremendous cash flow, allows great investment opportunities. TV is a big part of the strong cash flow and shareholder return initiative we launched a few months ago."
Fox could also be a buyer for the FoxCo. stations, which it spun off in 2008. Sources familiar with the situation say Fox regrets selling the stations and may attempt to reacquire some of them.
Then there's Allbritton. One source described the bidding for the group as a "horse race" that includes Raycom, Sinclair, Nexstar, LIN and others. People familiar with that situation say ABC also wants Albritton's crown jewel, WJLA in Washington, D.C. (DMA 8).
So, like the Local/FoxCo. auction, the Allbritton deal looks like it will have a lot of moving parts. Don't be surprised if groups that have been relatively quiet — namely, Hearst, Tribune and Scripps — enter the M&A fray.
Two smaller deals could also be in the offing.
Grant Communications, which owns seven stations, including five Fox and two CW affiliates in smaller markets, is likely to go to Sinclair, according to one source.
Then there's Granite Broadcasting with 10 stations in markets including San Francisco (DMA 6) and Detroit (DMA 11) and eight smaller markets. Granite is run by the same folks who ran Communications Corp. of America, which Nexstar recently acquired.
Meanwhile, don't be surprised if a number of other groups put up for-sale signs.
"Everybody's looking for a way they can partner up," says one highly placed source. "If you're not looking to merge or acquire, you're a bonehead dinosaur. Everybody should be on the block. The planets align occasionally and they're probably aligned more than they'll ever be again. If you bought assets to eventually sell, now is the time to sell."