Investors Look to Small TV Stations in Anticipation of Airwave Auctions

By Karla Robinson
September 6, 2012

Many small television stations are unprofitable or bankrupt, unable to compete with cable and the Internet. Some investors are hoping to flip these failing stations by taking them over and selling their airwaves at premium prices.
The Federal Communications Commission is planning an incentive auction to “reclaim spectrum for use by wireless phone companies and other bidders,” in order to meet expanding demand for wireless broadband services, reports the Wall Street Journal.
Private investors are planning small TV station purchases in major markets where the demand for spectrum is high. When the FCC auction comes — which may not even begin until 2022 — these investors hope to sell off airwaves at a significant profit.
“While the private-equity funds are buying stations for as little as several million dollars, observers say their value could be many times higher once the FCC auction gets under way,” the article states. “The speculative buying is providing an opportunity to small-station owners who want to cash out but don’t want to wait for the auction, which could be years away.”
For investors, buying the stations could be “a big payday,” says Marci Ryvicker, a cable and media analyst at Wells Fargo. “But there’s no guarantee.”

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