Spectrum auction offers new opportunities for TV broadcasters

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05/15/2014 by Entertainment & media
Spectrum auction offers new opportunities for TV broadcasters

At a glance

The planned 2015 FCC auction of spectrum currently used for television broadcast across the United States presents a potential opportunity for broadcasters to monetize a valuable asset – their wireless spectrum – in a new way. Despite this opportunity, multiple concerns surrounding the auction exist including the costs, potential for business disruption, efficiency and effectiveness of such a broad initiative, and the potential impact to channel brand recognition.

The planned 2015 FCC auction of spectrum currently used for television broadcast across the United States presents a potential opportunity for broadcasters to monetize a valuable asset – their wireless spectrum – in a new way. Despite this opportunity, multiple concerns surrounding the auction exist including the costs, potential for business disruption, efficiency and effectiveness of such a broad initiative, and the potential impact to channel brand recognition. As such, participating in the auction needs to be supported by careful strategic, financial, and tax planning. Auction paths such as channel sharing and band migration may be lucrative options, while tax treatments such as like-kind exchanges and involuntary conversions may further assist broadcasters in preserving the value received in the auction. Careful consideration of these options is critical in making the decision whether to buy/sell and maximizing asset value.