NEW YORK—While broadcast station advertising revenue has rebounded from its lows in 2020 during the pandemic lockdowns, a new analysis from Kagan, the media research group within S&P Global Market Intelligence, shows that deal making for broadcast stations remains at near historical lows.
However, year-end numbers for 2021 are higher than in 2020 giving reason for some cautious optimism for 2022, noted Volker Moerbitz, the lead analyst for the Kagan report.
The Kagan analysis showed that the total deal volume for 2021 amounted to $4.72 billion, with 92.6% ($4.20 billion) of the total came from the two top-deals of the year, Gray Television, Inc.’s acquisitions of Meredith Corporation and Quincy Media, Inc. and the spin-offs following those purchases.
During 2021, Kagan reported that there were seven more full power TV station deals with price tags between $11.4 million and $31.2 million and nine full power station sales in the $1.0 million to $10.0 million range. “In total, 77 full power stations were sold in 2021, which is only half of the number of full power stations sold in 2020 (145),” Moerbitz wrote.
On the upside, Kagan said, the average price for full power stations ($58.2 million) was the highest since 2014 and the average cash flow multiple rose from 8.5 in 2019 and 2020 to 8.7 in 2021.
The radio deal volume accounted for only four percent of the total, making up $190.2 million in 2021. Kagan said that represents the lowest radio deal volume in their records, dating back 40 years to 1982.
For the third year in a row, the average cash flow multiple for radio transactions remained stable at 6.6x forward buyers BCF. “In our estimates, only 25 full power radio stations were sold based on their cash flow,” Moerbitz wrote. “That is, however, five stations more than in 2020.”
The full analysis can be found here.
