Freedom Communications has put its eight TV stations up for sale. Asking price is $400 million to $500 million,reports TVNewsCheck
Says the article, "The asking price for the eight TV stations works out to eight to 10 times estimated 2010 cash flow of $50 million. There are a number of potential buyers for the Freedom stations, particularly in a piecemeal sale. They include Gannett, LIN, Nexstar, Gray, Young’s new owners and Newport. All of those group owners own or run stations in Freedom markets."
The story continues, " According to sources familiar with the prospectus, Freedom is asking $400 million to $500 million for the disparate group whose flagship is WPEC, the CBS affiliate in West Palm Beach, Fla. (DMA 38). The aggressive asking price, coupled with an M&A market still largely in hibernation and the far-flung geography of the stations, likely will make it a tough sell, one analyst thinks. ‘It’s going to be a challenge,’ says Barry Lucas of Gabelli & Co., noting that he had not seen the Freedom book. ‘It’s a tough mix of stations in an uncertain environment. It’s going to be tough to get financing.’
Just last week Freedom announced that Doreen Wade, well-known and well-respected in the TV industry, was leaving as president of Freedom Broadcasting, to be replaced by Tox station vet Tom Herwitz.
The TVNewsCheck article notes that Freedom also owns 25 daily newspapers, including its flagship Orange County Register, and 16 weekly newspapers, and has issued a ‘separate [sales] book for the newspapers."
Moelis & Co is handling the selling of the stations, the article says.
The story also notes the financial difficulties Freedom has experienced in recent years. "In Freedom’s case, its own financial data highlight the gulf between bid and ask in the station market.That data, disclosed in Freedom bankruptcy filings, show a 2009-10 book value of 9.5-10 times cash flow for the broadcast segment. The same filings show a substantially discounted market value: 7.3-8.8 times cash flow.Add in the newspaper segment and the numbers drop to 5.4-9.7 times cash book value and 5.4 times cash flow market value."