While some small TV stations in larger markets are struggling to make a buck off what they broadcast, recently investors have been snatching them up for how they broadcast.
Investors are buying up small stations in anticipation of what the FCC is calling incentive auctions, where broadcasters auction off their airwaves in an effort to free up much needed spectrum for mobile broadband. The speculators are hoping companies, such as wireless phone carriers looking to meet increasing demand for their services, would pay a hefty price for the added airwaves.
The Wall Street Journal says the gamble is not yet a sure thing:
Much about the auction remains uncertain, however, including the timing. The agency plans to publish its proposed rules for the process sometime this fall, and industry observers say the auction could begin as early as 2014. But the FCC has until September 2022 to conduct the sale and license the airwaves to wireless companies.
The auctions were made possible in early 2012 when Congress gave the FCC authority to meet rapidly growing demand for mobile broadband.
The WSJ points out the strain on spectrum from both broadcasters and broadband providers is greatest in larger markets, where investors are hoping to see the biggest return on their investments.
The buyers’ view “is that this is going to be a big payday for them, and it could be,” said Marci Ryvicker, a cable and media analyst at Wells Fargo. “But there’s no guarantee.”