Preston Padden and the Expanding Opportunities for Broadcasters Coalition are doing their best to not only shed light on station valuation in the incentive auction, they are also trying to get broadcasters a fair deal. And that includes a station-by-station valuation chart.
Padden explained that EOBC looked at hundreds of alternatives to the FCC’s starting formula. The FCC had “no appetite” for anything that strayed too far from its own auction architecture, so EOBC built just such a model.
Padden said that the EOBC proposal is an extremely modest change to the FCC formula and it raises all boats. It should be acceptable for both the FCC and the industry.
“We’ve done enough simulations to have confidence that the FCC can pay AWS-3 prices, clear 126 MHZ and still make a substantial contribution to the US Treasury,” Padden said.
The prices are simple starting prices. Nobody can predict the final outcome, which will be determined by thousands of individual decisions by the auction participants. The goal is to start going down from higher rather than lower prices.
The NAB has received this proposal and EOBC hopes the Association will sign on. In fact, EOBC is hopeful that the entire industry will get aboard.
The spreadsheet has a projected high end values for every television station in the nation. There are two sets of numbers, one with a multiplier of 900 and the other with a multiplier of 1200.
We asked what the multiplier referred to and were essentially told that we don’t want to know. Put it this way: The 900 chart, in which the EOBC formula is preferable to the FCC formula, and is still probably set too low. EOBC is suggesting use of a multiplier ranging from 1100 to 1500 and provided stats in which the 1200 multiplier is plugged in.
Padden noted that industry interest is increasing. Fox, ION, Univision, and Tribune all told the FCC that they are interested. Les Moonves at CBS just publicly reinforced his company’s interest. Others that at one time had no interest at all are now reconsidering their position. There is a substantial increase in interest throughout the industry.
Padden pointed out that the spectrum we’re talking about is the Hampton beachfront of spectrum. It travels great distances, it goes through walls, it is a unique value.
And he said there will be bidders. Verizon is going to launch an OTT later, AT&T is also talking about it, and it will consume enormous bandwidth – they will both have a great deal of motivation to acquire 600 MHz spectrum.
How much is your station worth? They’re all right here, in alphabetical order:
http://broadcastcoalition.files.wordpress.com/2015/03/fcc-scoring-formula-vs-eobc-scoring-formula1.xlsx
RBR+TVBR observation: This may be the very definition of news you can use if you own a television station. It remains to be seen where the FCC is going to go with this, but thanks to EOBC, it is now possible to start making educated business decisions ahead of the auction.
