At conference, CFOs note flow of financing dollars
A quartet of local broadcast CFOs predicted a spate of station deals in coming months as financing loosens up and private equity firms look to cash out their holdings.“Two years ago you couldn’t borrow a dollar. Today you can’t get out of the way of the money,” said Sinclair Broadcasting’s David Amy at the Gabelli & Company Movie & Broadcasting conference in New York – uniting two somewhat overlooked sectors in the investment universe these days. Sinclair made several sizeable acquisitions late last year – of the Four Points Media and the Freedom Communications station groups for close to $600 million in total. In between those deals, Scripps acquired McGraw-Hill’s stations for $200 million. Private individuals may get into the mix as well as companies. On Thursday afternoon, Young Broadcasting announced that its CEO Tony Cassara is leaving to pursue outside interests, “including the ownership of other broadcast stations.” LIN TV’s chief financial officer Rich Schmaeling said his group is looking for multiple stations in the same markets. Belo Corp.’s Carey Henrickson said, “We are a believer in consolidation in the industry. We just haven’t found the right deal for us… but banks are willing and open to give us cash when we find it.” Execs stressed the importance of being number one or two in a market since it’s extremely hard to move stations up in the ratings without significant investment that may belie attractive multiples for potential buyers. The group defended local fare as key to a healthy ratings mix and, naturally, touted broadcasting as the most effective medium and one that’s seeing a resurgence in key advertising like autos and anticipating a big political year, at least for stations in key battleground states. “Whatever happened to Oprah? She leaves broadcast television, she goes to a cable channel, and where does she go? What’s happening?” said Amy, referring to OWN, the Oprah Wifrey and Discovery network that’s been struggling since its launch early last year.