An analysis from Wells Fargo's Marci Ryvicker says that Sinclair, Nexstar and Media General have the highest median spectrum values as a percentage of enterprise value at 52%, 49% and 27%, respectively.
Sinclair, Nexstar Tops In Spectrum Worth
Sinclair and Nexstar have the greatest spectrum value as a percentage of enterprise and equity value, according to an analysis from Wells Fargo’s Marci Ryvicker (link to the report here).
The Wells Fargo equity research report, released Thursday morning, comes on the heels of a report released by the FCC on Wednesday that pegs broadcast spectrum reserve prices as high as $45 billion.
The FCC report was prepared by Greenhill & Co. and used research from other sources, including the Expanding Opportunities for Broadcasters Coalition, that provided the basis for the $45 billion figure.
The Wells Fargo report further notes that Sinclair, Nexstar and Media General have the highest median spectrum values as a percentage of enterprise value at 52%, 49% and 27%, respectively. Those numbers are calculated to include a 20% tax on proceeds from sale of the spectrum.
Enterprise value typically is defined as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents.
Equity value, considered the value of a company available to owners or shareholders, is defined as the enterprise value plus cash and cash equivalents, short and long-term investments, minus all short-term debt, long-term debt and minority interests.
The Wells Fargo report ranks Nexstar, Media General and Tribune Media as having the highest hidden spectrum values, at $11-, $4- and $3-per share, respectively.
Per Wells Fargo, hidden spectrum refers to spectrum that may not be strictly necessary for broadcasting an HD channel. While each full-power channel is 6 mhz, only 3 mhz is necessary to broadcast an HD signal. Hidden spectrum may also include VHF channels and spectrum by channel sharing.