Private equity firms are snapping up broadcast companies at high prices, and that likely encouraged Nexstar and Lin TV to explore sale opportunities, Standard & Poor’s analyst Michael Altberg said. Providence Equity Partners Inc. agreed last month to pay Clear Channel Communications Inc. about $1.2 billion for its 56 TV stations. Oak Hill Capital Partners bought nine TV stations from the New York Times Company for $575 million earlier this month. Broadcasting is a mature industry with fairly flat revenues, but the cash flow still makes the business attractive, Altberg said.
Lin TV was a logical seller in a consolidating industry, Bear Stearns equity research analyst Victor Miller wrote in a research report on its announcement. Nexstar’s decision to consider a sale was more surprising because the company is believed to have bid on Clear Channel Communications’ TV portfolio, he said.
"This is a significant change for (Nexstar)," Miller wrote in the report. “We believed that the company would continue its consolidation march …"
Nexstar Broadcasting owns KSNF in Joplin and KSFX in Springfield, and is de facto owner of KODE in Joplin and KOLR in Springfield.