If the buyer of five Class A TVs around Pittsburgh later sells the stations in the FCC’s incentive auction, it will pay a percentage to the seller, based on a sliding scale.
Pa. LPTV Sale Includes Auction Escalator
As the FCC’s spectrum incentive auction draws closer, a growing number of TV deals are including provisions that give the seller a portion of the profits the buyer may realize from selling the spectrum to the government.
The latest example is the sale of five “Class A-eligible” TV stations around Pittsburgh (DMA 22) by Pittsburgh-based Abacus Television to Fifth Street Enterprises LLC. Fifth Street is an investment group, including Ron Bruno of Pittsburgh.
The price of the stations is just $25,000, but if Fifth Street decides to sell the stations’ spectrum in the FCC incentive auction, it will pay Abacus an additional amount of the FCC payout based on a sliding schedule:
- Up to $15 million in net auction proceeds, Abacus will receive 30.1%.
- $15 million-$18 million: 25%
- $18 million-$21 million: 20%
- $21 million-$24 million: 15%
- $24 million-$27 million: 10%
- $27 million-$30 million: 5%
- More than $30 million: 20%
Abacus Television is owned by Benjamin Perez, who also owns 15 more low-power stations in Pennsylvania, Florida, West Virginia and Ohio.