For TV stations in the United States, business was good in 2006. In fact, last year marked an eight-year high in television station transactions, with $18.1 billion coming from the sale of 182 stations in 2006, a new survey has found. The record was due in part to the sale of Univision and four NBC stations.
At the same time, thanks to national elections, the television industry experienced strong revenue growth in 2006, achieving an 8.2 percent increase in station revenues from the year before, totaling $2.5 billion. However, without elections, predictions are that revenue will fall in 2007, said the first edition of BIA Financial Network (BIAfn)’s quarterly “Investing In Television Market Report.”
Sales of television stations will remain high in 2007, BIAfn predicted. “Broadcast companies are weary of whether the television ownership rules will relax, and some are deciding to take action regardless of if it happens or not,” said Mark R. Fratrik, vice president of the BIA Financial Network.
“More owners are beginning to reassess where they should keep their assets and what they can do to increase value,” he continued. “Indications of this trend began in 2005 when Emmis Broadcasting began to get out of the television market completely and NBC sold some of their small market stations. We see this strong activity continuing in 2007 with many current and new television groups growing sharply as a result.”
BIAfn, a financial and strategic advisory firm serving the media and communications industries, predicts stations revenues will jump considerably in 2008 — upwards of 10 percent — due to political advertising surrounding the presidential election.
“Television continues its roller coaster cycle of on-again, off-again revenue increases due to election and Olympic year rotations,” said Fratrik. “There is no denying that the industry has benefited greatly from those two variables despite the erosion of viewers to cable, Internet and other competition.”
BIAfn notes that the Univision sale spotlights the continued growth and importance of Spanish television. In 2006, revenues from Spanish television broadcasters increased by 10.3 percent, two points higher than the industry average. BIAfn attributes the growth to the significance of the viewership group and the larger availability of Spanish programming, and the company predicts that growth will continue to outpace the industry in 2007 and beyond.