After the pandemic lockdowns put a damper on deal-making earlier this year, Kagan reports broadcast mergers and acquisitions picked up the pace during the third quarter. Radio and television deals totaled $534.7 million during the three months ended Sept. 30, in what the firm labels a “substantial rebound” from $90.3 million in the second quarter which was an all-time low attributable to the COVID-19 pandemic.
The vast majority of deals have been on the television side during 2020. Kagan tallies there have only been $371 million worth of radio deals through Sept. 30. If that pace holds through year-end, it will bring the lowest total on record since before the 1996 Telecom Act ushered in a wave of consolidation and reshaped radio ownership.
The biggest radio trade during third quarter was iHeartMedia’s $8.5 million deal to buy WWRL New York (1600) and the Edison, NJ-licensed translator W280GA at 103.9 FM from NJ Broadcasting. iHeart will use the signals to air the company’s fast-growing Black Information Network (BIN) in the New York market where it already owns six other stations. WWRL will begin broadcasting BIN under a $60,000-per month local marketing agreement set to begin today (Nov. 2).
Educational Media Foundation scored the second- and third-largest radio deals during third quarter. In July, EMF announced the $3.4 million purchase of nine FM stations from various holding companies controlled by George Flinn Jr. Then in September, Crista Media agreed to sell contemporary Christian “Spirit 105.9” KFMK Austin to EMF to focus exclusively on its radio presence in the Pacific Northwest. For a deal valued at $6 million, or what Kagan calculates was a $2.67 “per pop” based on the population covered by the Class C2 signal, EMF nabbed what will be its third full-power FM in the Austin market.
As radio’s deal market continues to meander in a wait-and-see for what the Supreme Court will do regarding media ownership rules, Kagan’s quarterly update shows more action is happening in television where $2.8 billion worth of deals have been struck during the first three quarters of 2020. During the last quarter, the largest share of the deal volume came from E.W. Scripps Co’s purchase of Ion Media for $2.65 billion. Kagan puts the price tag on the 71 local television stations included in that deal at $338 million. The second-largest TV deal was Mission Broadcasting’s $75 million deal to buy WPIX-TV New York from Scripps.
Kagan said although 63% of the quarter's deal volume came from Scripps' acquisition of Ion Media, there were still 123 other transactions during the third quarter which added $196.7 million to the 2020 tally. That total amounted to more than twice the total second-quarter volume, it said.