Wednesday, June 22, 2016

Guest Blogger Stephan Sloan: Moving Day

This week's progress in the Reverse Auction includes the rounds in which stations will become frozen in much greater numbers than in the previous weeks' activity. I anticipate that somewhere around 300 television stations will be frozen in the auction in rounds 31 through 45. 

While the last week's rounds illustrated the price decrement in relation to opening bid, this week makes clear the diminished bids in terms of dollars. Round 31's activity is expected to yield an average of $68 million freeze price with a high of $108 million and a low of $16 million (a Class A station). At the week's expected ending round 45, the freeze prices are down to an average of $8 million with a high of $13 million and a low of $5 million. The following chart illustrates the declining freeze prices by stations and round. 

Considering the post-auction scarcity of television stations, especially UHF channels, it is hard to imagine many markets where this level of pricing is not a significant discount to what will be available to station owners post auction. 

Since the Round 21-22 delay, the bidding appears to have progressed smoothly. From what we have observed so far I do not anticipate additional delays and am impressed with the FCC staff's ability to conduct, process, report and repeat the bidding rounds. 

Finishing this week on schedule leaves short work for next week to conclude the Reverse Auction. Soon we will find out what will be required to validate this auction in the Forward Auction. 

Stephan Sloan
Director, Media Services Group