2011 begins with some very positive signs in the media dealmaking universe.  Hubbard Broadcasting’s announced $505 million purchase of four markets from Bonneville is the largest radio deal in over five years.  While terms of associated debt TBD, the underwriting of the senior debt portion of this transaction is another great sign of a potential unfreezing of the transaction market.  The transaction reportedly is in the 8-8.5x 2011 BCF price range.  While the price is certainly a discount from the last wave of major radio transactions, it certainly quantifies that significant value still can be commanded for radio assets. 

Similarly, Cumulus publicly announced bid of Citadel at a 15% premium to existing stock price (making the offer in the 8.5-9.0x EBITDA range) is another sign that new private equity is seeking the radio space (in this case Crestview Partners, who has teamed with Cumulus CEO Lew Dickey to seek radio acquisitions in a private venture outside of Cumulus).

In the television sector, Raycom’s recently announced acquisition of the Southeastern Media properties (which will be owned by related Raycom entity in LMA agreement) and longtime television operator SJL’s (backed by Alta Communications)  purchase of Toledo/Flint properties are signs of life as well. 

Bank debt cautiously returning based on positive operating results in 2010 in most media sectors and consensus industry increases projected in 2011 (albeit generally conservative).   Overall, there is much pent-up demand for assets to move, so look for transaction volume to continue to become more active in Q1 and into q2.

Tweet this!