Consolidating has big benefits for U.S. broadcasters, said...
Consolidating has big benefits for U.S. broadcasters, said Moody’s Investors Service in a report Tuesday. Moody’s said broadcast buyers in a merger get “immediate financial arbitrage with minimal risk,” so they can raise retransmission consent fees, and in turn “offer…
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sellers generous multiples for the chance to gain arbitrage opportunities.” Moody’s said the broadcasters have full coffers to make such purchases due in part to the political ad campaigns of 2012. Moody’s said the value of M&A deals among TV broadcasters in 2013 and 2014 will be more than $3.5 billion, and could exceed $6 billion. The report spotlighted LIN Television, Nexstar, Sinclair and Tribune Co., as likely buyers while “Allbritton Communications and broadcasters owned by financial sponsors, including FoxCo, Granite Broadcasting and Local TV” could be takeover possibilities. “In the near future, Moody’s expects that Oak Hill Capital will sell stakes in Local TV and FoxCo, and that Silver Point Capital will follow up its divesting of holdings in Communications Corporation of America with the sale of Granite Broadcasting,” said Moody’s.