Tuesday, April 26, 2011

Report from the NAB Show in Las Vegas

Now that a week and a half have passed since returning from the NAB Show in Las Vegas (and I have caught up returning my phone calls and answering email), I would like to share some thoughts on this year’s convention.

We were back at the Encore for the second year (after a long run at the Bellagio). Attendance for the show was reported up over last year; the traffic in our suite would tend to bear that out. All of our guys were busy with meetings on Monday and Tuesday; some stayed over for meetings on Wednesday as well.

The “tone” was noticeably improved over the last couple of years. We all continue to lament the absence of senior debt, but there is are active crowds of both buyers and sellers. And in spite of the lack of bank financing, some deals are actually getting done (also a marked improvement over prior years).

Station operations are generally continuing their upward trend in performance. Most operators had a pretty good year last year and expect even better results in 2011. As you might expect, there was a lot of chatter about the Citadel/Cumulus and the Bonneville/Hubbard deals. Most believe that the valuation of these two deals sets the high water mark for BCF multiples. We agree. Our company opinion is that those deals traded in roughly the 8.0x to 8.5x range (or at least will be there by the closing dates). Buyers are offering 6’s and sellers are asking 8’s for the less prime inventory. The deals which are getting done appear to be in the 7’s.

Tower sales continue to be of interest. The tower trading marketplace is robust with well-financed and aggressive buyers. Tower cash flow multiples are 8x to 10x for broadcast and high teens and up for wireless.

While most of my time was spent in our suite in meetings, I did make it to Erwin Krasnow’s annual FCC Breakfast at the Las Vegas Country Club. It was well attended and a good show, as always.

Next stop, the Radio Show in Chicago in the Fall.

George
Media Services Group