Let’s Have An Auction!
Let me preface this by saying there is a better chance of any station license being handed to me as a gift than for this to actually happen. With many broadcasters looking to cut or redistribute their broadcast assets, let’s setup a system for them to maximize the return for buyers and sellers.
Our hypothetical system would work as such:
February 2015: A private auction database is setup similar to the one the FCC uses for new allocations. Group owners place which stations/clusters they are willing to divest in the database. Owners agree to not sell any asset that is placed in auction until after auction is completed.
March-July 2015: Potential bidders register for the auction and sign confidentiality agreements for the stations they are interested in and gain access to the books. The bidders establish they have the funding placing necessary money in escrow.
August 2015: Auction takes place. Much like FCC auction it takes place over rounds lasting until bidding caps on each station/cluster.
Why an auction? It enables groups like iHeartMedia that has so much debt to clear, CBS which is looking to divest certain station assets, or even an small group looking to maximize their returns. It enables fresh blood or smaller groups to negotiate on the same level as bigger or established players. An auction will lead to higher prices as negotiations will take place in a spot where bidders will see what price they need to beat leading to some groups overpaying for highly coveted assets.
Worst case scenario is some of the included stations don’t reach the minimum price set by the owner. In those cases they now know who was interested and can negotiate following the auction. As there’s nothing forcing a group to participate there’s nothing to lose if an owner is looking to cash out.
Just one possible way to enable existing groups to cash out or divest properties they need to raise or reallocate funds and allow fresh blood and growing groups access to existing broadcast properties.
Addendum: I just received an e-mail from a broker asking why I would eliminate their need. Nowhere in this hypothetical do I question the need of a broker and still expect them to play a role in guiding buyers and sellers to this auction, distribute the books to qualified bidders, and play a role in final contract signings.