EARNINGS CALL

Sinclair Eyes M&A Market With Interest

In the station group's earnings call with analysts today, management says they're in a prime position to take advantage of all the stations now on the block.Said David Amy, Sinclair EVP-CFO: “There’s nothing we have to go out and purchase.… We can be very selective. If the price make sense for us, we can deal.”

Let’s make a deal.

OK, Sinclair Broadcast Group boss David Smith didn’t exactly say that during the company’s second-quarter earnings conference call Wednesday morning. But what he did say is that the station group is watching M&A activity with interest.

“We’ve noticed a number of groups out there for sale,” said Smith, Sinclair president-CEO, in response to a question from analyst Aaron Watts of Deutsche Banc. “If we look at those businesses and they fit our profile and are accretive … we’ll take a look at them.”

Watts had noted that there are more groups on the sales block now than there have been in several years. They include Nexstar, McGraw Hill, Young and Freedom.

Sinclair ranks 9th among the biggest station groups with roughly 20% coverage of U.S. television households.

Smith and David Amy, Sinclair EVP-CFO, both noted that many private equity players are seeking to cash out their broadcast holdings — a factor that works to the advantage of potential strategic buyers such as Sinclair.

BRAND CONNECTIONS

“There has to be 50 private equity companies that own 50-100 TV stations and they don’t know what to do with them,” Smith said. “I don’t see interest from the private equity side — they’re all trying to bail.”

Barry Lucas, Gabelli & Co. analyst, noted that if private equity players are indeed on the sidelines, that gives an advantage to the few strategic buyers that have the appetite and financial capacity to increase their portfolios.

Smith and Amy agreed. “When you look at Sinclair, I think we’re advantaged,” Amy said. “There’s nothing we have to go out and purchase.… We can be very selective. If the price make sense for us, we can deal.”


Comments (2)

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Monica Alba says:

August 3, 2011 at 4:30 pm

G-R-E-A-T! Just when you thought the industry couldn’t get worse, you get the “slum lords of TV” to buy more property. Their on-air presentations are a wreck. They don’t treat employees very well. And they “make cheap TV”. Couldn’t someone just buy their management a bunch of old RCA VHS camcorders and let them “play TV” somewhere else?! (And if they don’t like the comments, maybe they should consider working towards changing their reputation)

Patricia Logan-Olson says:

August 3, 2011 at 10:13 pm

Ugh!


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