LIN TV Sells Spectrum Licenses to Aloha
Deal with largest owner of 700 MHz spectrum means a nice return for station group
By Glen Dickson -- Broadcasting & Cable, 9/17/2007 1:01:00 PM
Station group LIN TV Corp. has reached a deal with mobile-TV proponent Aloha Partners, L.P., to sell 31 licenses in the lower 700 megahertz (MHz) band—specifically, UHF channels 54 and 59—for $32.5 million in cash. The deal, pending FCC approval, is expected to close in the fourth quarter.
The sale to Aloha, which is the largest owner of 700 MHz spectrum and is currently testing its “Hiwire” mobile-TV service in Las Vegas, would bring LIN some $26.3 million more than the $6.2 million it originally paid for the licenses, which are in the lower 700 MHz “C” Block and are clustered in the Northeast and Upper Midwest markets, in addition to markets in South Central Texas.
“It didn’t hurt us,” says LIN TV Executive VP of Digital Media Greg Schmidt of the company’s investment in FCC auctions in 2002 and 2003.
Schmidt notes that the spectrum was relatively cheap back in 2002 because of uncertainty over the completion of the digital TV transition, which was necessary to make the spectrum available. LIN made its initial investment in the 2002 auction to protect its owned or operated stations that were broadcasting on those channels in New Haven, Conn., Providence, R.I. and Austin, Tex., as it didn’t want to face pressure to vacate those channels early if another company secured future rights to the licenses. (The company owns or operates 29 stations in 17 markets.)
“Obviously, we were concerned at the time because we didn’t know if the current timelines would stick,” says Schmidt.
LIN bought additional 700 MHz spectrum in 2003 to protect its station on Ch. 54 in Grand Rapids, Mich., but also with an eye to potentially using the spectrum to provide other services, such as wireless broadband, or selling it. Now LIN, which is currently exploring how the digital TV spectrum can be used to deliver mobile TV through its participation in the Open Mobile Video Coalition, is confident of its DTV transition schedule and doesn’t plan to use the spectrum itself. Hence the Aloha deal.
Adds Schmidt, “Strategically, this seemed like the right thing to do.”
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