Auction 98 Complete, Raises Over $4 Million for 102 FM CPs
FCC Auction 98 ended Thursday after 10 bidding days and 51 rounds, generating just over $4 million and selling 102 FM radio construction permits (CPs) out of 131 that were up for bid, the auctions website said. The amount of money generated and the level of participation were at the levels largely expected by the radio industry, several attorney experts said. Though the numbers for this auction were down from previous ones, that decline is consistent with the quality of the permits offered in auction 98, they said.
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“These permits are in isolated markets,” said Wilkinson Barker broadcast attorney David Oxenford. “Most of the stuff in larger markets was sold off long ago.” That Auction 98 could draw 88 bidders, generate several bidding competitions and over $4 million in revenue shows great interest remains in the FM band, said Fletcher Heald broadcast attorney Harry Cole. The last FM auction, No. 94 in 2013, raised $4.12 million in net winning bids (see 1305080034).
The biggest sale in Auction 98 is a Class A FM permit in Westfield, New York, that sold to Erie Radio Co. for $714,000, after a multiround bidding war with Westfield Broadcasting. Much of the bidding in FM auctions typically comes from interests local to the permit being bid on, said Fletcher Heald auction attorney Raymond Quianzon. Since it can take years for the FCC to put an FM CP up for auction, it's hard for new entrants to get into the business through buying permits at auction, broadcast lawyers said. Instead, purchasers are often already in the radio business, and using the auction to increase their radio holdings or wall off a rival, they said.
The $714,000 is less than the largest bid in the 2013 FM auction, which was just over $2 million, a blog post by Quianzon said, but that auction generated an amount of total revenue very similar to that in Auction 98. FM auction revenue and bids have been on a steady decline since the first one in 2004, Quianzon told us. That 2004 auction generated over $150 million, he said.
The 29 unsold permits likely will be auctioned the next time around, Cole and Quianzon said. Auction 98 had 11 permits that had gone unsold in the last auction; all of them sold this time around, they said.
Nearly half the permits in Auction 98 sold for below $10,000, eight for less than $1,000, Quianzon said. Eleven permits, including Westfield, sold for over $100,000 each. “The results of the latest auction are in line with previous auctions and indicate that there are still active and well-funded players in the FM radio market,” Quianzon wrote.
Though the FM industry got a boost recently from news that AT&T would push for activated FM chips in its newest smart phones (see 1507280054), that information is probably too new to have affected Auction 98, Cole said. Bidders in the auction have four weeks to pay the FCC, Quianzon said.