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What’s a television station worth in today’s market? The short answer, according to someone who tracks valuations is, at the end of last year, it was about eight times the station’s 12 months’ trailing EBITDA (earnings before interest, taxes, depreciation and amortization). Most people would call this eight times cash flow. This is lower than in years past. It’s also based on a historically small number of transactions.
There are certainly other ways to calculate a station’s value and many questions that should be asked before coming to a conclusion. The thing is, it doesn’t matter how you get the number if there isn’t a buyer willing to pay the price.
One case to consider is the recently announced sales of some of what are known as the Imagicomm stations. These stations are in markets ranging from Nielsen-ranked No. 51 (Memphis) to No. 196 (Eureka in Northern California). According to much-repeated speculation, Imagicomm is selling the stations for significantly less than it paid for them in 2022. The issue seems to be a combination of falling advertising revenues and escalating costs for network reverse compensation.
Medium and small station groups, particularly those with stations in smaller markets, are likely to see the greatest decline in station values. Their cash flow is falling. The loss of ad dollars to digital providers such as Google and Meta’s Instagram is particularly noticeable in Nielsen markets 125 and greater; digital media businesses can offer advertisers better attribution than a station can. Fewer ads, which were already down