Wednesday, October 14, 2009
At the right selling multiple of Tower Cash Flow ("TCF"), selling your broadcast tower(s) can be a great way to raise cash. (Note: TCF is your revenue minus operating expenses such as ground lease, utilities, property taxes and monitoring).
For much of the last year, broadcast tower assets languished at low multiples of TCF with few, if any buyers. Tower companies in general were capital constrained like every other business, and if they did buy something, it was usually wireless towers. Many tower companies expressed concerns about the creditworthiness of broadcaster tenants. I saw some offers at 3x to 5x TCF, but no takers.
Fast forward to today. Many broadcasters and sitting on great FM tower assets and the market is beginning to heat up. While capital is still tight, "vertical real estate" is a scarce commodity. Multiples have been bid up into the 8x to 10x range. With tower consolidators getting back into an acquisition mode, station multiples in a lower range than towers, and with "cash being king," now might be a good time to consider selling your towers. I would be happy to confidentially discuss your options with you.
If you would like more information on maximizing the value of your broadcast towers, I strongly recommend that you pick up a copy of Erwin Krasnow's and Henry Solomon's book, "Broadcast Towers - A Step-by-Step Guide to Making Money on Vertical Real Estate." You can order it from the NAB Store (http://www.nabstore.com/books.html).
Media Services Group