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Media Bubble Alert: TV Station Sales Skyrocketing

TV Stations Bubble Graph - H 2013

The "perfect storm" of a recovering economy, a better ad market and retransmission fees are pushing sales of U.S. stations up 130 percent this year.

This story first appeared in the Nov. 22 issue of The Hollywood Reporter magazine.

One of the Hollywood's least sexy businesses is on a hot streak.

Sales of U.S. TV stations have soared this year, up 130 percent through June 2013 over all of 2012. The reason? "There's kind of a perfect storm," says Volker Moerbitz, an analyst for SNL Kagan who cites a recovering economy, an improved ad market (especially political ads that often go to local stations) and an influx of cash from retransmission consent.

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The biggest transaction to date was the June sale of 20 Belo stations to Gannett for $1.5 billion in cash and $715 million in debt. In that deal, a Dallas-Fort Worth ABC affiliate was valued at $412 million, far more than 2007's biggest sale of $285 million. Station owners Gannett, Comcast and Nexstar have been among active buyers, but none matches Sinclair Broadcast Group, which has spent more than $2 billion this year, catapulting it to third place among station groups, behind Fox and CBS. 

Adding to the frenzy: anticipation over the FCC auctioning some broadcast spectrum, which will raise as much as $7 billion for stations and the government. "That has impacted prices lately," says Moerbitz. "It's a lot healthier market."