CBS Also Passed on Auction: “We Make So Much More Money by Broadcasting”
CBS Corporation will receive no proceeds from the FCC’s broadcast incentive auction. Chief Operating Officer Joe Ianniello said during an earnings call this week the company considered selling some spectrum but ultimately did not sell any full-power stations. “At the top, we saw those initial values and we said, oh, that could be interesting in certain circumstances,” he said according to a transcript from Seeking Alpha.
“As the auction continued to drop rapidly in value, it just didn’t make sense for us to participate because we make so much more money by broadcasting in the highest standards possible. That’s our bread-and-butter, so we weren’t going to participate in a process where values were going down significantly,” said the CBS executive.
Wells Fargo believes most of the proceeds, a total of some $8.4 billion, went to independent, non-public companies; but of broadcasters covered by Wells Fargo, the most meaningful amounts were received by Sinclair Broadcast Group ($313 million) and Tribune Media Company ($190 million).
“Spectrum in this auction was valued at a lower level than any other auction since 2006,” writes Wells Fargo analyst Marci Ryvicker in a client report. The reverse auction came in well below expectations — $10 billion vs. the $28-37 billion that analysts too initially forecast. Much of that was due to timing issues, Wells Fargo and other Wall Street analysts have observed, saying the FCC held this auction to close to 2015’s AWCS wireless spectrum auction.