2017 Broadcast Station Deal Volume Reaches $8.24B

RADIO ONLINE | Tuesday, January 2, 2018

U.S. broadcast station mergers and acquisitions volume reached $748.8 million in the fourth quarter of 2017 and closed the year at $8.24 billion, as tracked by Kagan, a media research group within SP Global Market Intelligence. This is the highest annual deal volume since 2014 and the third-highest since the financial crisis of 2008. In Q4, one-third of U.S. broadcast station deal volume ($248.3 million) came from radio deals.

The total broadcast deal volume in 2017 amounted to $8.24 billion, with $3.21 billion in the radio and $5.03 billion in the TV sector. The biggest stories of 2017 were the mergers of Entercom and CBS Corp.'s CBS Radio announced in February and of Sinclair Broadcast Group Inc. and Tribune Media Company announced in April. The deals stand for 80% ($2.56 billion) of the radio deal volume and 75% ($3.76 billion) of the TV deal volume. But even without these deals, the radio market would have registered a 23% higher deal volume than in 2016, while the TV deal market would have grown by 79% compared to 2016, excluding Nexstar Broadcasting Group's merger with Media General Inc.

Radio Deals:

October 23: In the top radio deal of the quarter, Merlin Media LLC sold its last two stations, Chicago's Alternative WKQX-FM and Classic Rock WLUP-FM. The stations have been operated under a local marketing agreement (LMA) by Cumulus Media since 2014. Cumulus has now exercised a $50.0 million purchase option, which translates to an average $2.94 per pop for both stations.

December 18: The only other large radio deal was the radio portion of the TEGNA acquisition in San Diego. Kagan allocated $22 million of the total to KFMB-AM and FM.

A large part of the quarter's radio deal volume stems from estimates of station swaps. Entercom Communications Corp. had to divest a number of stations to comply with FCC ownership rules after its merger with CBS Radio. Entercom has made station swaps with iHeartMedia and Beasley Broadcast Group, trading eleven of its stations for seven iHeartMedia stations, one Beasley station and $12 million in cash. In total, Kagan estimated the total value of these two swaps at $148 million.