U.S. broadcast station mergers and acquisitions volume reached $748.8 million in the fourth quarter of 2017 and closed the year at $8.24 billion, as tracked by Kagan, a media research group within S&P Global Market Intelligence. This is the highest annual deal volume since 2014 and the third-highest since the financial crisis of 2008.

In the fourth quarter of 2017, one-third of U.S. broadcast station deal volume ($248.3 million) came from radio deals. TV deal volume reached $500.5 million, with 65% of that from the top deal of the quarter.

The total broadcast deal volume in 2017 amounted to $8.24 billion, with $3.21 billion in the radio and $5.03 billion in the TV sector. The biggest stories of 2017 were the mergers of Entercom and CBS Corp.'s CBS Radio announced in February and of Sinclair Broadcast Group Inc. and Tribune Media Company announced in April. The deals stand for 80% ($2.56 billion) of the radio deal volume and 75% ($3.76 billion) of the TV deal volume. But even without these deals, the radio market would have registered a 23% higher deal volume than in 2016, while the TV deal market would have grown by 79% compared to 2016, excluding Nexstar Broadcasting Group's merger with Media General Inc.

TV Deals

• December 18: TEGNA Inc. announced the $325.0 million acquisition of Midwest Television Inc.'s stations in the San Diego, Calif., market. The most valuable part of this cluster is KFMB-TV, which airs CBS on its primary channel and The CW on a secondary subchannel. At a 9.0x forward seller's multiple, Kagan allocated $303.0 million of the total to the TV station. Also part of the deal was the KFMB-AM/FM combo.
• December 4: NBCUniversal's Telemundo Station Group acquired all stations of ZGS Communications Inc. for $75.0 million. With the exception of one low-power Indie, all the stations (one full-power, nine Class-A and three low-power) are Telemundo affiliates.
• November 29: HC2 Holdings Inc. announced on that it would acquire the Azteca America network from affiliates of TV Azteca SAB de CV. Part of the announcement was an agreement with Northstar Media LLC, the biggest licensee of Azteca affiliates, to take over the licenses of 19 stations. Kagan estimated a value of $33.0 million for the station group. This marks HC2's first full-power station acquisition and since September, the company has acquired 80 small TV stations in 39 markets, representing one of the big stories of the fourth quarter.

Radio Deals

• In the top radio deal of the quarter, Merlin Media LLC sold its last two stations, Chicago's Alternative WKQX-FM and Classic Rock WLUP-FM. The stations have been operated under a local marketing agreement by Cumulus Media Inc. since 2014. Cumulus has now exercised a $50.0 million purchase option, which translates to an average $2.94 per pop for both stations.
• The only other large radio deal was the radio portion of the TEGNA acquisition in San Diego. Kagan allocated $22.0 million of the total to KFMB-AM/FM.
• A large part of the quarter's radio deal volume stems from estimates of station swaps. Entercom Communications Corp. had to divest a number of stations to comply with FCC ownership rules after its merger with CBS Radio. Entercom therefore engaged in station swaps with iHeartMedia Inc. and Beasley Broadcast Group Inc., trading eleven of its stations for seven iHeartMedia stations, one Beasley station and $12.0 million in cash. In total, Kagan estimated the total value of these two swaps at $148.0 million.