The TV Industry is Consolidating Like it’s 1999

October 22, 2013 Leave a comment

October 21, 2013, 5:01 PM

The TV Industry is Consolidating Like it’s 1999

KEACH HAGEY

The use of so-called “sidecar” agreements to let TV station owners get around FCC media ownership rules has been going on for two decades. But, as the WSJ reports today, the role of these agreements in the rapid consolidation of the TV industry in the last year and a half has begun ringing alarm bells in Washington. Just how fast is the TV station business consolidating? The anti-media consolidation group Free Press has an exhaustive report out today painting a detailed picture. The group writes that 2013 is on track to be the biggest year for broadcast television consolidation since 1999, with 211 full-power stations changing hands in the first eight months of this year.The $10.2 billion in TV deals that have taken place this year make 2013 the fourth-biggest deals year on record – and it’s only October. Ten companies now control 55% of all local TV advertising revenues, according to the report.

Some of the drivers of this M&A boom have been detailed in previous WSJ stories – namely the rapid rise in the “retransmission consent” fees that broadcasters can demand from pay-TV outfits, and the Citizens United-enriched flood of political advertising money every couple years. But Free Press argues that the Federal Communications Commission’s policies toward “sidecar” agreements are also a factor. The group argues that, by allowing TV station owners to run multiple stations in a market that it doesn’t own, “FCC policies are a major factor driving the latest wave of consolidation.”

As today’s WSJ story notes, the FCC has been reviewing its rules toward these agreements as part of its regular media ownership rules review – which has been pending for years. Sinclair CEO David Smith argues that such agreements are necessary for survival in a digital world due to “the evolutionary nature of the competitive ad-selling marketplace.”

Filed under TMT Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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