Stockholders appear overly skeptical about prospects for TV station participation in...
Stockholders appear overly skeptical about prospects for TV station participation in the FCC voluntary incentive spectrum auction, Guggenheim Partners analyst Paul Gallant wrote investors Tuesday. Given the strong rhetoric from industry leaders such as CBS indicating a lack of interest…
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in the auction, the skepticism is understandable, he said: But it may be overblown. It’s in broadcasters’ interest to “suggest they are not interested in selling” or remain quiet about their plans if they are, Gallant said: “That could help drive at least somewhat more favorable FCC rulings for broadcasters in the coming year” on auction-related items. It could entice wireless carriers to signal they'll pay well for the spectrum to induce greater broadcast industry buy-in, he said. Investors too may be doubtful because they typically don’t hear from the types of station groups most likely to participate, Gallant said. “Privately-held stations are less likely to have retrans revenue and are more natural sellers of spectrum,” yet these private station owners have little dialogue with Wall Street, he said. “We think this skews the information flow to investors about the likelihood of broadcast spectrum sales.” FCC officials indicated at the NAB Show this week that some station groups have expressed interest in the auction. (See separate report in this issue.)