Has Fisher Communications, Inc. (FSCI) Found a Merger Partner?

Meanwhile, Gray Television, Inc. (NYSE:GTN) reported similarly strong results for its network of 36 stations, with increases in revenues and operating income of 31.8% and 103.6%, respectively, compared to the prior year.  Its total revenues reached a record level for the company, with substantial increases in the political and auto advertising categories.  The company also benefited from its 10 stations that are affiliated with the NBC network, as the Olympics broadcasts provided a one-time bump to its financial results.

Gray has also been successfully transitioning its viewership to the web, with a 40% year-over-year increase in total page views of its various web properties.  The company’s online push led to a positive financial impact, with a 24% increase in online advertising revenues versus the prior year.  The net result was strong operating cash flow during FY2012, which allowed the company to reduce debt and further invest in its future online capabilities.

The companies that own television station affiliates were left for dead until recently, as their debt loads seemed unmanageable in the current competitive environment.  However, proactive operators have built engaging websites for viewers who want online access to local news and information.  While Lin TV and Grey Television have a diverse geographic base of properties, Fisher’s focus on a limited number of markets likely creates a need to reduce business risk through a business combination.  Since mergers are inherently uncertain, investors should pass on Fisher and put Lin TV and Gray Television on their watchlists.

The article Has This TV Broadcaster Found a Merger Partner? originally appeared on Fool.com and is written by Robert Hanley.

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