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LIN TV Corp. Message Board

martelxo92 16 posts  |  Last Activity: 4 hours ago Member since: Jun 29, 2006
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  • Reply to

    Spectrum values

    by martelxo92 7 hours ago
    martelxo92 martelxo92 4 hours ago Flag

    I have one concern about the perceived value and one only. The broadband players spent 45 Billion dollars last year on that auction. They don't have an endless amount of money, doesn't matter how big they are. They will have to refill their coffers for us to get the value we are all looking for.
    What balances that concern for me is the fact that broadband, wireless, streaming and whatever else they call it aren't just cool words, they are the future of communication. Sending a broadcast signal from a transmitter is not, right or wrong.
    My friend had a concern about the way Tom the Cable guy and the FCC have set this up as a reverse auction. Basically, if there were two stations up for grabs in one market then the purchaser of spectrum would have the ability to bid both broadcasters down to see who would take the least amount of money. So in a 50 million dollar valued spectrum market you may have 2 stations selling. The purchaser would literally get the 2 to the lowest bid that would be accepted by the last one standing. Broadcasters will have to somehow stand together and force the bids higher or the purchaser will literally take them to the bottom of the price range. Not sure how you do that without collusion.
    I think because of this type of auction it may not happen in 2016. That is why I have a 2 year mindset when buying these stocks. Huge political and Olympics next year topped off by a boatload of cash from the auction in late 16 or early 17 and then we will have peaked.

  • Had a conversation first thing this morning with an owner that has been in this business his entire adult life. He is sitting on just a few stations at this point and is basically waiting on the auction to complete his exit from broadcasting and his retirement. I called him because I had interest in a station which I helped him operate during 08-10.. He was trying to sell this station in 08 and 09 to anyone who would buy it. Through the great recession he lost his affiliation and basically he was just trying to sell the station like scrap metal. His asking at that time was 750K, I feel I could have bought it for 500K but at that time didn't see the value in it.
    I asked him this morning was he still interested in unloading the station. After a 20 minute explanation he said he would start the conversation at 10 million. Basically that ended the conversation with me. This station has negative cash flow at this time. No affiliation and they are running an off brand multicast network with one GM/Salesperson/marketing person. Literally paying the power bills and tower rental. Not even that.
    The conversation made me realize just how real the spectrum value is in EVC. He and I discussed EVC and he has dealt with the managers over the years. I shared with him I thought the value at auction was around 4 billion. He said he agreed they are in several sweet spots and that most upper level managers with this company are starting to look at an exit plan. Wouldn't surprise him to see EVC put the entire group on the spectrum block. He said there was a little bit of strain between EVC management and Univision. He said they could give Univision the real #$%$ and make a bundle of cash as they do it.
    Just thought I would share. I'm going to start buying EVC as of this discussion and only as a spectrum play. There is a real underlying value that will show itself over the next 2 years.

  • Reply to

    Any Opinions On Where The Bottom Is?

    by danashenfelter Jan 6, 2015 10:33 AM
    martelxo92 martelxo92 Jan 27, 2015 4:00 PM Flag

    I'm a spammer. I'm paid by MEG to come on here and promote their common stock. You should sell before it gets sub teens. That money you lost basically went into my pocket and you aren't getting it back.

  • Reply to

    Any Opinions On Where The Bottom Is?

    by danashenfelter Jan 6, 2015 10:33 AM
    martelxo92 martelxo92 Jan 27, 2015 10:50 AM Flag

    You are incorrect. I have been on a broadcaster buying hiatus for a year or so. I never said anything about buying MEG, SBGI or any broadcaster over the past year. I came back in around late October when the MEG-Lin deal was getting close to approval and suggested there was an opportunity to buy Lin and hold it for 2 months and make 15% on your money. Which is exactly what happened. Lin was at $22-23 with a buyout looming at 25.97 within a couple of months. It was on written documents waiting for anyone who studied them to profit from them. I also started buying MEG at $13.75 to 14.25 knowing that the stock needed to trade to $17.50 by close day. It did this as well. I exited at 17.55. I sold 6K of my shares and had a small balance left because I honestly thought there would be a little pullback after this "forced" run higher.
    I am now buying MEG and SBGI with a two year time frame. I know what's coming.
    Sounds to me you lost money on this stock and you are looking for someone to blame. Wrong guy, wasn't me telling you to buy this at $20. If I were you I would double down at this point. Literally. If you want to get your money back by as many shares as you did in the $20's and you'll lower your break even point to around 17-18.

  • Reply to

    Huge Debt On the Books Huge Goodwill

    by usavalue1 Jan 23, 2015 11:35 AM
    martelxo92 martelxo92 Jan 26, 2015 4:28 PM Flag

    You are correct on the traders not being interested. I'm willing to hold and add because when it happens I want all of it. I think the downside is very limited on MEG and SBGI here because SBGI has a buyback plan in place and with the cash flow coming out of MEG now I think much lower and they'll put one in place also. Sadusky is very shareholder friendly like SBGI and he'll do what he can to prop MEG up.
    1st quarter ad revenue is coming in flat to last year, which is good since there are no Olympics this year. Retrans continues to be our growth vehicle. New rates are 1.25 to 1.50 a sub. When the Comcast and TW merger goes through it will make it even easier. Comcast owns NBC and they fully support retrans growth since they benefit hugely on NBC and Comcast passes it on to the viewer. Good Times Ahead.

  • Reply to

    Huge Debt On the Books Huge Goodwill

    by usavalue1 Jan 23, 2015 11:35 AM
    martelxo92 martelxo92 Jan 26, 2015 2:47 PM Flag

    Been buying in over the past month. Hate to burst the bubble on the goodwill and intangibles panic but guess what, that is being amortized and is a tax deduction. The larger the goodwill and intangible assets the better.
    I think people are going to be surprised at the amount of cash flow the newly created SBGI is putting out. They have gone nuts over the past 2 years purchasing everything out there and you're about to see the results associated with that. They are getting debt at 5-6% and buying assets with a 12% return on them. In that case you buy all you can buy.
    I think there is a run coming over the next 2 years. 2015 will be a record year for SBGI, followed by 2016 which will be another record year.
    If you could see the cash flow projections laid out for these broadcasters for the next few years you would buy and sit back with confidence. I feel just as strong about the broadcasters now as I did 5 years ago. I think we can see a double here over the next two years. It's about retrains growth, debt refinancing and this thing called spectrum auction. In other terms you can say it's about record revenue, lower interest costs and an influx of billions of dollars into these guys through the auction. What about that is not promising?

  • Reply to

    Any Opinions On Where The Bottom Is?

    by danashenfelter Jan 6, 2015 10:33 AM
    martelxo92 martelxo92 Jan 22, 2015 11:13 AM Flag

    Umm, no. I'm not buying on margin nor am I buying aggressively. I have picked up plenty and suggest you do the same.
    I am also adding to SBGI as a lot of that debt they are carrying will evaporate in the next 18 months when they rid themselves of some of their smaller networks in the spectrum auction.

  • Reply to

    Any Opinions On Where The Bottom Is?

    by danashenfelter Jan 6, 2015 10:33 AM
    martelxo92 martelxo92 Jan 6, 2015 1:57 PM Flag

    I'm increasing size as we go further down. I know the ultimate direction is up so I'll average down until it turns. By the way I really like what Sinclair has done as well. They are a cash printing machine after those purchases. Borrowing money at 5% and buying assets with a 12% return is a really good deal. Thus the consolidation in the industry.
    One other item I meant to post above was that now most of these affiliates have 30-40% of their revenue tied up in retrans now. That will be a source of stability if we go into a downturn in the economy, which I don't see happening.

  • Reply to

    Any Opinions On Where The Bottom Is?

    by danashenfelter Jan 6, 2015 10:33 AM
    martelxo92 martelxo92 Jan 6, 2015 11:03 AM Flag

    Very little volume on this drop compared to the volume that took it up. I think there was also some gamesmanship involved in the recent run up as the close day was getting near. I bought some yesterday and some more today. I think we are underpriced at this point. I don't really read charts but fundamentally speaking this will be a great year.
    Although local revenue will only be in the flat to plus 3% range and national will be in the same range we are basically keeping flat with expense increases through core revenue. The game changer is still RETRANSMISSION FEES. I've been in this business for a long time and have a great read on what is going on and what is coming. As I look a these new agreements I am shocked at not only the size of increase but the relative ease that the cable companies and satellite operators are agreeing too.
    I am seeing contracts go from .35 to 1.25 per sub. I have seen contracts going from .65 sub to 1.40. And you aren't seeing the blackouts in the bigger groups anymore. I think they are realizing they now have to pay for the value. One company I have close ties with is going to show a retransmission fee increase of 70% this year. This source of revenue growing at this pace is largely due to the networks demanding more than 50% and asking for a per sub price. Actually makes it easier for the affiliate to demand more. The stunt at WISH was a game changer. Even with the elevation of network fees the affiliates are still getting a great percentage of this revenue but now it's off of a larger number.
    Almost all of these contracts are 3 year deals and the network deals we are seeing are closer to 5-8 years. This money isn't going away for some time. Much value to be created over the next 3 years in the affiliates.
    I think 2016 will be even crazier with the wide open presidential and Olympics. Add the consolidation and influx of cash from the spectrum grab and it wouldn't shock me to see 50% moves higher from here.

  • Taking some off the table. I think the closing price on Friday is $17.50. Might sell a little more if we get a bump this afternoon.

  • Reply to

    Martel-your meg price target for 2015

    by leekatz2001 Dec 16, 2014 6:16 PM
    martelxo92 martelxo92 Dec 17, 2014 9:16 AM Flag

    Low 20's. They should see about 30 million in synergies in 2015.
    I believe due to the way the merger was structured the price of MEG has been held artificially low by a group that would benefit from a lower MEG price. Which would be any remaining MEG shareholder. Seems every time it tried to bounce someone pulled it back down. If MEG goes above $17.50 before Friday I would be shocked. $17.50 X 1.47= $25.72. Right around the agreed upon price of $25.95.
    If it gets carried above that price in the next 2-3 days I'll dump because I think at 4pm on Friday it will rest no higher than $17.50. Just my black helicopter, conspiracy theory way of thinking.
    Once the smoke clears and they have their 4th quarter call in early February I think the new numbers with more accurate forecasts for 2015 and 2016 will help the investment community understand it is under priced. I think we'll see lower 20's by April.

  • Reply to

    Looking for breakout

    by ifengeqox Dec 16, 2014 10:23 AM
    martelxo92 martelxo92 Dec 16, 2014 3:59 PM Flag

    Well, you found it. Maybe we can get a bounce in the overall market after the fed speaks and get this thing to your 18.51. This stock is worth well more than the current price. I think we can go much higher over the next year. The people buying right now should be giving us upgrades after the numbers are released in Feb.

  • Reply to

    Valuation and spectrum sales

    by martelxo92 Dec 15, 2014 2:29 PM
    martelxo92 martelxo92 Dec 16, 2014 10:39 AM Flag

    I've never followed EVC because I know nothing about their business and I don't know anyone from their company. After doing a quick look at their spectrum values, WOW. They would be better off to just sell their entire company to the spectrum jockeys. According to the estimated values their stations have close to 4 Billion dollars of value tied up in their spectrum worth. Their common stock plus debt is only valued around 1 billion. They are located in some really attractive markets. The value of spectrum far exceeds the value of their cash flow for the next 20 years. The key since they have multiple stations in these attractive markets they could literally sale one or two in each market and still remain in business with the remaining station(s).
    I'm not telling you anything you don't already know. If you have money to invest for two years then I think there is some serious upside here.

  • By the end of 2016, possibly 2017 if we can push it later, there will have been a spectrum auction. Someone in this sector will have acquired billions of dollars from the auction. These billions will have gone to a multitude of companies but I think one that will receive a lion's share is Lin. (MEG) I think this money shared within the industry can only push cash flow multiples higher. The selling companies are selling to get cash to do what? Pay down debt? I doubt it, most of our debt is very reasonably priced right now. I think the majority of this money will go into further consolidation within the industry which means further bidding up of equity prices.
    In looking at the values posted by the FCC (which we all know is BS because they don't know) the markets that Lin TV has extra licenses are some of the most highly desired properties. Hartford, Springfield, Massachusetts, Rhode Island, Ohio and for MEG there is KRON in San Francisco. With the exception of KRON the newly formed company will have licenses in those highly priced markets that are running This TV or CW. You are talking about getting over 100 million dollars for a license you are currently making 2-5 million a year in cash flow from.
    If I use the lowest value that the FCC gave for the markets that Lin and MEG have which they could offer up licenses for we are talking about 700 million dollars. Now to make the FCC prices more reasonable you could deduct 40% from their original propaganda piece and you still have a grab of 420 million dollars.
    This cash plus the cash flow multiple increases that I see coming out of this are not currently priced into these stocks valuations. I've always looked over the auction in my investing because it has always been so far off. I think now it's close enough to start including that as part of your valuations. The auction will happen, it's just a matter of time. Lin has multiple licenses that should be in this discussion when it happens.

  • If we can pop through here we head to 18-19. I think we are very underpriced in this area. The FCC approval will happen in the next week, two max. This deal will be approved before the 19th.

  • Reply to

    This is easy money with the buyout looming

    by martelxo92 Oct 2, 2014 11:38 AM
    martelxo92 martelxo92 Oct 30, 2014 10:13 AM Flag

    Hey Dan, good to see you still around. Yes, I'm still working in the industry but have no idea about the what is up with EVC. I haven't been on these boards for awhile. I traded out of all my broadcast stocks last year because I felt they were fairly valued, looks like they had a little more to run. My largest single investment is still privately help shares of my own company so I still have plenty of exposure to this industry. I didn't think I needed anymore exposure to the industry but saw Lin trading at $22 with a merge of $26 coming. Reading mediatrader's synopsis above makes sense and I might not make as much money as once thought.
    The industry is still fairly valued right now if not a tad bit overvalued in my view. Local spot sales are flat and national continues to erode, especially in the 50 plus markets. With CBS changing the game on retrans take to the network it has forced broadcasters to be even more aggressive on retrans so that continues to be a positive but don't know how long that can hold out with Tom the Cable guy sitting on the throne at the FCC. Not sure how much this overall market can continue to go up either and that weighs on my thoughts of the industry.
    I'm thinking MEG may have a positive number in 4th quarters guidance with the states they are in having decent political years. As much as you hear about political dollars choosing other avenues to spend their money (online, mailers, Cable) broadcasters continue to grow their take each cycle. Still no better way to reach a specific region than local broadcasters.
    If we get a little downward pressure from the overall market and it brings the broadcasters down with it I'll be back in buying mode but for now I'm just waiting it out. I hope if that happens you'll be back on the board sharing your ideas too as well as mediatrader.

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