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Fox's $350M Auction Take Reflects Early Overestimates

NEW YORK—Fox Television Stations’ anticipated $350 million in auction proceeds fell short of the expectations of analysts at Wells Fargo, who, along with many others, expected higher overall revenues.

“This is a far cry from the initial $2 billion that we had calculated... when we were assuming a reverse auction of $30 billion” versus the $10 billion broadcasters asked for 84 MHz of TV spectrum, Wells Fargo Senior Analyst Marci Ryvicker said in a note. “The key point we are trying to make here is that the reverse auction cleared at a substantially lower number than we had anticipated... so the proceeds coming in should also be substantially lower than our prior calculations.”

Fox TV, in a brief announcement issued this morning, said “one or more” of its bids was accepted and that the sale of its spectrum “ is not expected to lead to any material change in the operations... for any of the affected television markets,” which indicates the possibility that Fox intends to implement channel-sharing. The TV group has 10 duopolies—six in top 10 markets: New York, Los Angeles, Chicago, Dallas, Washington, D.C. and Houston; and four more in Minneapolis, Phoenix, Orlando and Charlotte, N.C.

Fox TV said it anticipates receiving the $350 million in the current calendar year. Fox TV comprises 28 stations in 18 markets and covering nearly 37.35 percent of U.S. TV homes.