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LIN TV Corp. Message Board

  • mediatrader mediatrader Nov 9, 2012 9:50 PM Flag

    Damn JV

    Most of the news was good. I would liked to have seen a 40% + increase for 3rd QTR like Scripps and other groups, however 36% was close enough. The bad news was just when we thought LIN's contributions to the JV would end for 2013, Comcast tells them they need to build a new facility in Dallas / Ft. Worth.and will need millions from LIN until 2015. They will probably tell us then they need to rebuild their facility in San Diego and we will be on the hook for another year.This the number one reason LIN does not get its due cash flow or earnings multiple compared with current valuations.It is truly aholding our investment back. The good news items from the announcement should let us see a 6 handle very soon.

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    • The JV concern is way overblown. Retrans kick in next year and remember (nobody ever talks about this), the JV has $0 reverse retrans, it's 100% margin to us. If you look at the multiples that the CBS Nashville went for, the value of the JV easily covers the debt. What the market views as a liability will soon be viewed as an asset. Don't forget about our NOLS, $308m is nothing to sneeze out, Sinclair would love to have it.

      • 1 Reply to value_invstr
      • Value, you're a smart guy and I value your opinion, but what i read in the press release basically said that the reason they are still having to pony up another $6 million is because of capital expenditures AND the fact that retrans ISN"T going to kick in as they expected. I myself thought Comcast controlling NBC would jack up retrans so they could collect from other carriers as well. instead, they have determined that politically it is in their best interest to keep retran low which hurts TVL BIG TIME. This also will affect the cash flow multiples for which the value of the the JV is worth. I don't see Comcast letting it go bankrupt but we are YEARS away from this not being an albatross. It's a political football. I would also infer that somewhere out in the universe of retrans, TVL is sticking it to Comcast and this is their way to payback. DaninFW

 

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