Understanding the Market Value of a Public Broadcasting License

Public Media Company has worked with more than 300 public radio and television stations, involving more than 100 transactions between public broadcasters. This experience, coupled with a comprehensive sales database, provides the information necessary to assess the value of a public broadcasting license.

A formal valuation can be a critical piece of information when you are considering an expansion or change in your ownership structure. Valuations help inform all parties involved in a transaction understand the market value of the underlying asset that drives a public media outlet. Here’s how valuations are deployed in public media:

Financial Leverage: A license is considered an intangible asset. Public broadcasting stations could leverage the market value of their license in financing their projects and attracting philanthropic support.

Acquisitions/Sales: In contemplating the acquisition of a new radio or television station, or selling an existing station to free up cash to invest in operations or new initiatives, it is important to know the market value of the licenses.

Partnerships/Spectrum Sharing: For stations that plan to share channels or enter into partnership agreements that involve the use of spectrum or licenses, market valuation forms the basis for the negotiations.

The intrinsic value (or “Public Service Value”) of a station incorporates the market value of the license and, more importantly, any other tangible and intangible value-creating factors associated with the station’s public service. More specifically, Public Service Value considers the following factors:

> Revenues raised through individual donors, major givers, businesses and nonprofit organizations
> Promotional underwriting spots provided to the licensee (educational institution or state) and other related nonprofit organizations
> Student training opportunities
> Volunteer time
> Economic value through the employment of staff
> Opportunities to grow station budget via ongoing and planned revenue-generating initiatives

Stations may use Public Service Valuations for a variety of purposes including, but not limited to, (1) a true assessment of the value that they create for their licensees, (2) philanthropic outreach, (3) marketing, and (4) public relations.

If you have a need for Public Media Company’s valuation services, please email Evran Kavlak at evran@publicmedia.co.