The owner of Seattle’s KOMO-TV could find considerable interest despite the broadcast industry’s challenges, says an analyst.
Seattle Times business reporter
Based on recent sales, and given Fisher’s holdings in the prime media markets of Seattle and Portland, any such sale could net hundreds of millions of dollars for Fisher’s shareholders.
It would, however, bring to an end local ownership of commercial broadcast television in Seattle. All of the city’s other over-the-air TV stations belong to media companies based elsewhere.
Fisher, whose 20 TV stations include ABC affiliate KOMO and Univision affiliate KUNS in Seattle, said Thursday that its board will “explore and evaluate potential strategic alternatives intended to enhance shareholder value, which could result in, among other things, a possible sale of the company.”
Fisher’s roots in Seattle go back more than a century. For years it has faced pressure from hedge funds and other activist investors to either generate more cash — which could then be paid out in dividends — or to sell the company, either piecemeal or as a package.
So far, Fisher has gone the piecemeal route. First it got rid of its flour-milling operations, and later most of its real-estate holdings. In 2007, it sold its $190 million stake in insurer Safeco, and in 2011 it raised $160 million by selling Fisher Plaza, the landmark complex near the Space Needle that houses its headquarters as well as office and retail space.
Fisher said Thursday it had hired as its financial adviser Moelis & Co., the investment-banking firm that also advised Fisher on structuring the $10-per-share special cash dividend it paid out last fall. Law firms Perkins Coie and White & Case are also working with Fisher.
It also stressed there’s no deadline for a decision, and it might decide to do nothing.
The outcome likely would depend on how much success Moelis has in shopping the broadcaster around.
Short of a full-on sale, Fisher could sell just some of its TV or radio stations, raise new capital, issue new debt or restructure the company.
Jimmy Schaeffler, a senior analyst at The Carmel Group, a consulting firm in California, said “there’s probably a rather robust pool of potential buyers” for part or all of Fisher.
Local broadcasters face many new challenges these days, Schaeffler said — streaming-video competition from the likes of YouTube and Netflix, pressure from the federal government to sell back the spectrum once used for analog broadcasts, and battles with cable carriers that often can be fought better by larger companies.
“That said, the broadcasters are still a very strong entity,” he said. “For someone who wants to watch the very best content on TV, the broadcasters have the lion’s share of it. For those who are willing to take the risks to partner with new technologies and work out some of these new business models, there’s a lot to be said for buying now and expanding your station group.”
Several groups have, in fact, been doing that, including Nexstar Broadcasting of Texas, Sinclair Broadcast Group of Maryland, E.W. Scripps of Cincinnati and LIN TV of Providence, R.I.
Another intriguing possibility would be Hearst Television, given the conglomerate’s long history in Seattle media via the now-shuttered Post-Intelligencer newspaper (and its online-only successor, PI.com).
Schaeffler also suggested that a company with significant “new media” presence might take a look at Fisher — say, Apple, Google or even Microsoft.
“These big companies that haven’t been traditional TV companies — they will be TV companies in the future,” he said. “They’re realizing more and more that their future is tied to video distribution, whether it’s games or movies or news, and getting real close to the local TV affiliates may enhance their prospects and limit the risks.”
Estimating what Fisher might fetch in an all-in sale is difficult, given that by at least some measures the company already is pricier than many of its peers.
Fisher stock jumped $4.72 Thursday, or 16.6 percent, closing at $33.21, for a market capitalization of $295 million.
That share price gave it a price-to-sales ratio of 1.83, versus a four-company average of 1.07.
Its forward price-to-earnings (P/E) ratio, meanwhile, stood at a lofty 29.13, compared to the peer average of 11.6.