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A period of consolidation is under way in local television — and with it, a renewed debate about the implications of merger and acquisition activity on the industry.
A torrent of deals began in September when the bought seven local stations from the Four Points Media Group for $200 million, and it continued in October when the E. W. Scripps Company bought nine stations from McGraw-Hill for $212 million.
Last week, in the single biggest television station acquisition in four years<a href="http://www.monclersalestore.com">Moncler Store</a>, Sinclair bought eight stations owned by Freedom Communications for $385 million.
Other groups of stations are believed to be on the market now, further signifying that the broadcast business is becoming more attractive to buyers after several painful years. Analysts say firms that bought into the business years ago — like Cerberus Capital Management, which founded the holding company Four Points in 2007 — are ready to sell.
“We really took it on the chin as an industry during the great said David Amy<a href="http://www.monclersalestore.com/8-moncler-hoodies-women">Moncler Hoodies Women</a>, the chief financial officer for Sinclair, referring to steep declines in advertising revenue. But what the economy took away, politics may help restore. Television stations are among the biggest beneficiaries of political ad spending — one of the primary reasons for the increase in sales activity. The election cycle of 2012 is expected to be exceptionally lucrative for stations in competitive states.
“Political hot spots have become a key criteria in the selection of acquisition targeting,” said Steve Ridge, the president of the media strategy group at Frank N. Magid Associates, an adviser to local stations. In some medium-size markets — like Des Moines, where the first caucus will be held in January — “the infusion literally changes the balance sheet,” he said.
Sinclair, which became one of the biggest station operators in the United States through its recent acquisitions, says it is contemplating more purchases. “Generally speaking, the industry needs consolidation,” Mr. Amy said, to better compete against cable companies that sell ads and wireless companies that want broadcast spectrum.
Station operators say that the F.C.C. rules make it more difficult to do business; Mr. Amy said the regulations have hampered the industry.
The F.C.C. commissioner who has been the most critical of media mergers, Michael J. Copps, said last week that he expected “many more deals” as “the economy improves and station groups continue the quest for all those elusive efficiencies to satisfy the investors.”
“The bottom line,”he said, <a href="http://www.monclersalestore.com/14-moncler-scarf-and-hat">Moncler Jackets Men</a>“is fewer voices, less news and a diminished civic dialogue.”
Critics of consolidation say that some station owners sidestep the F.C.C. media ownership rules by outsourcing news production to others, especially in smaller markets — what Ms. Wright of Free Press calls “covert consolidation.”
