Industry Update Broadcast Industry June 2015

Industry Update Broadcast Industry June 2015 New York Chicago Boston Hartford Orlando Princeton www.mpival.com Page 1

Table of Contents * Industry Overview... 3 Key Indicators... 4 M&A Overview... 5 Public Market Data 1... 8 About MPI... 10 * This publication is also available in soft copy on the MPI website: http://www.mpival.com/resources.html. Page 2 www.mpival.com 2

Industry Overview This publication focuses on major events, developments and trends within three segments of the Broadcast Industry: radio broadcasting, television broadcasting and cable programming. Each of the Broadcast Industry segments is dominated by a few sizable players, and most firms operating in the Broadcast Industry are in the mature stage of their business lifecycle. The Broadcast Industry faces the primary challenge of limited advertising dollars, which is a key driver to revenues, and has resulted in significant consolidation among industry participants in recent periods. Other important trends and challenges are discussed below: Radio Broadcasting: This segment includes broadcasting stations, networks and syndicates that broadcast audio programming through AM, FM and satellite radio channels. Radio suffered greatly following the 2009 recession as advertising budgets were slashed and the remaining advertising dollars were largely allocated to television and internet-related marketing efforts. Overall, Radio is struggling to remain relevant in the face of competition from digital media (such as online radio) and satellite radio. Television Broadcasting: This segment consists of companies operating studios and facilities that program and deliver over-the-air transmission of audiovisual content to the public. TV broadcasting has contended with increased competition for viewing audiences and advertising dollars from online channels and a shift in consumer preferences to cable services. TV broadcasters have begun to demand retransmission fees from cable companies for the right to retransmit television broadcast programming. Retransmission fees will continue to represent an important revenue source going forward. Cable Programming: This segment consists of studios and facilities that distribute television programs through cable systems on a subscription or fee basis. This segment has experienced a widened selection of channel offerings, which resulted in an increase in the number of consumers willing to pay for upgrades to existing cable subscriptions in recent years. Despite the recent growth experienced by cable programmers, the industry faces an evolving source of competition from the Internet. As the stock price performance graph below suggests, the Broadcast Industry as a whole has outpaced the S&P 500 over the last two years. In particular, the television broadcasting segment has led the charge and continues to outpace other subsectors and the S&P, despite significant volatility during 2014. 500% Quarterly Benchmark Performance* Cable TV Radio S&P 500 400% 300% 200% 100% 0% 100% Page 3 www.mpival.com 3

Key Indicators US Travel Statistics Total Vehicle Miles (Trillions of Miles) World Price of Crude Oil ($ per barrel) Total Vehicle Miles 3.15 3.10 3.05 3.00 2.95 2.90 2.85 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 120.00 100.00 80.00 60.00 40.00 20.00 0.00 Price of Crude Oil Advertising Expenditures Total Avertising Expenditures ($Billion) 310.00 300.00 290.00 280.00 270.00 260.00 250.00 240.00 230.00 220.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Broadband Connections vs. Cable TV Subscriptions Broadband Connections (Millions) Cable TV Subscriptions (Millions) Broadband Connections 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 110.00 105.00 100.00 95.00 90.00 85.00 80.00 Cable TV Subscriptions Sources: S&P Capital IQ, Bloomberg, IBISWorld. Page 4 www.mpival.com 4

M&A Overview Highlighted Transactions Alpha Media Acquires Morris Radio Morris Communications sold its radio division to Alpha Media LLC. The Morris radio division owned thirty six radio stations in eight markets. The deal will bring Alpha s radio holdings to a total of 135. Alpha Media will be paying $38,250,000 for Morris Communications radio holdings. The purchase will consist of $18,250,000 in cash and the issuance of 8,196,722 shares in Alpha Holdings valued at $20 million and 8,196,722 shares in Alpha Holdings II valued at $6,585. Charter Communications To Buy Time Warner Cable for $55, Billion, Creating Cable Powerhouse Charter Communications will buy Time Warner Cable for $100 a share in cash and 0.5409 of its shares, in a merger that will create the second largest cable and broadband operator in the United States. The cash and stock deal values Time Warner Cable at $195.71 a share based on May 20 closing stock prices, or over $55 billion, and comes a months after Comcast dropped a $45 billion bid for Time Warner Cable amid regulatory scrutiny. Communication industry operations are looking at mergers as a way of increasing scale and efficiency, while also serving new consumer habits such as the growing adoption of streaming video. Charter will transform into an industry powerhouse with a significant presence in the Northeast, Southeast and western U.S. Page 5 www.mpival.com 5

M&A Overview, cont d Industry Trends Radio Radio Subsector M&A Activity (Announced Transactions) Radio Subsector Median M&A EBITDA Multiples Total Deal Value ($bn) # of Deals Median EBITDA Multiple Overall Median (14.1x) $45.0 $40.0 $41.0 80 70 35.0x 3 32.3x $35.0 $30.0 $25.0 $20.0 60 50 40 25.0x 2 15.0x 16.7x $15.0 $10.0 30 20 1 11.6x 11.1x $5.0 $0.0 $3.9 $2.8 $1.5 $0.9 $0.2 $0.6 $1.1 $0.5 $0.1 2006 2007 2008 2009 2010 2011 2012 2013 2014 6/30/2015 10 5.0x 2006 2007 2008 2009 2010 2011 2012 2013 2014 6/30/2015 Note: value of indicates no available data for that period. Recent Transactions - Radio Radio Subsector Announced Date Buyer Target Target Description 4/7/2015 Leighton Broadcasting Inc. Result Radio, Inc. And KAGE Inc. Result Radio, Inc. And KAGE Inc. represents the combined operations of Result Radio, Inc. And KAGE Inc. in their sale to Leighton Broadcasting Inc. Result Radio, Inc. owns and operates Radio stations in the United States. 4/8/2015 Saga Communications, Inc. M. Belmont Verstandig Inc. Access.1 Communications Corp. NY., Nine Radio Stations in Shreveport and Tyler Longview comprises radio stations located in the United States. 4/29/2015 Alpha Media LLC Adelante Media Group LLC, KTUB AM, KDUT FM and KBMG FM 5/15/2015 Alpha Media LLC Morris Communications Company, LLC, Thirty Six Radio Stations in Eight Markets 5/22/2015 Inspiration Media of Texas LLC; Pennsylvania Media WMKI AM in Boston and KMKI AM in Dallas Adelante Media Group LLC, KTUB AM, KDUT FM and KBMG FM comprises three radio stations. Morris Communications Company, LLC, Thirty Six Radio Stations in Eight Markets comprises radio stations located in the United States. WMKI AM in Boston and KMKI AM in Dallas comprises two radio broadcasting stations. Source: S&P Capital IQ Page 6 www.mpival.com 6

M&A Overview, cont d Industry Trends Television & Cable TV and Cable Subsector M&A Activity (Announced Transactions) TV and Cable Subsector Median M&A EBITDA Multiples Total Deal Value ($bn) Deal Count Median EBITDA Multiple Overall Median (11.1x) $160.0 $140.0 $146.3 45 40 45.0x 4 41.5x $120.0 35 35.0x $100.0 $80.0 $60.0 $40.0 $37.5 $69.9 $87.4 30 25 20 15 10 3 25.0x 2 15.0x 1 12.5x 27.1x 9.5x 7.9x 15.4x 9.8x 8.9x 10.2x $20.0 $0.0 $17.5 $8.2 $4.7 $1.9 $1.4 $5.7 2006 2007 2008 2009 2010 2011 2012 2013 2014 6/30/2015 5 5.0x 2006 2007 2008 2009 2010 2011 2012 2013 2014 6/30/2015 Note: value of indicates no available data for that period. Recent Transactions Television & Cable Television and Cable Subsectors Announced Date Buyer Target Target Description 2/18/2015 ODS Technologies, L.P. HRTV, LLC HRTV, LLC operates a television based multimedia network that provides news, information, and entertainment to horse fans worldwide. 3/24/2015 DTV America Corporation Adelante Media Group LLC, WBWT LP and KBTU LP WBWT LP and KBTU LP of Adelante Media Group LLC comprises two television broadcasting stations. 4/22/2015 Gray Television, Inc. WAGM TV, Inc. As of July 1, 2015, WAGM TV, Inc. was acquired by Gray Television, Inc. WAGM TV, Inc. owns and operates a television station for customers in Northern Maine and Western New 5/20/2015 Altice S.A. (nka:altice N.V.) Cequel Communications Holdings I, LLC LIN Media LLC, together with its subsidiaries, operates as a local multimedia company in the United States. This transaction closed on December 19, 2014. 5/23/2015 Charter Communications, Inc. Time Warner Cable Inc. Time Warner Cable Inc., together with its subsidiaries, provides video, high speed data, and voice services in the United States. Source: S&P Capital IQ Page 7 www.mpival.com 7

Public Market Data 1 Company Guideline 6/30/2015 52 Week Enterprise EV/EBITDA EBITDA Margin Market Cap/Earnings Consensus Growth (4) Ticker Close (2) High Low Value (EV) (3) LTM NFY LTM NFY LTM NFY EBITDA EPS Radio Broadcasting Beasley Broadcast Group Inc. BBGI 4.63 7.48 4.23 191 15.5x NA 17.7% NA 2.7x NA NA NA Cumulus Media Inc. CMLS 2.03 6.69 1.90 2,938 11.0x 10.3x 21.4% 26.8% 52.6x 29.9x (0.2%) 33.2% Emmis Communications Corp. EMMS 1.00 3.03 0.99 348 9.0x NA 16.2% NA 0.4x NA NA NA Entercom Communications Corp. ETM 11.42 13.33 7.86 867 9.3x 8.7x 24.5% 26.2% 17.1x 16.9x (2.8%) 1.5% Radio One Inc. ROIA.K 3.17 5.07 1.35 1,124 9.2x NA 27.9% NA 2.7x NA NA NA Saga Communications Inc. SGA 37.85 45.61 33.58 231 7.0x NA 24.6% NA 15.1x NA NA (14.0%) Salem Communications Corp. SALM 6.33 11.00 4.38 436 9.4x 8.7x 17.5% 18.8% NM 17.1x 1.5% 25.9% Spanish Broadcasting System Inc. SBSA 6.75 6.99 1.99 433 11.3x NA 26.3% NA 2.2x NA NA NA Median 9.3x 8.7x 23.0% 26.2% 2.7x NM 0.2% 13.7% TV Broadcasting Gray Television Inc. GTN 15.68 16.67 7.16 2,167 9.9x 11.5x 39.7% 38.1% 22.1x 28.7x 21.5% 18.9% Tribune Media Company TRCO 53.39 89.99 52.55 7,402 13.3x 15.2x 28.2% 32.6% 10.8x 43.5x (14.6%) NA Media General, Inc. MEG 16.52 23.75 12.45 4,526 17.3x 12.1x 31.6% 47.2% NM 67.2x NM NM Nexstar Broadcasting Group, Inc. NXST 56.00 60.21 36.41 3,258 12.8x 10.9x 36.3% 36.1% NM 21.7x 30.4% 61.2% Sinclair Broadcast Group, Inc. SBGI 27.91 36.14 23.88 6,492 9.1x 9.2x 34.4% 37.0% 12.7x 17.8x 24.8% 54.4% Median 12.8x 11.5x 34.4% 37.0% 12.7x 28.7x 23.2% 54.4% Median EBITDA Multiples Radio Median EBITDA Multiples Television 2 18.0x 16.0x 14.0x 12.0x 1 8.0x 6.0x 4.0x 2.0x 10.4x 10.3x 8.9x 8.2x 8.9x 1 9.3x 2009 2010 2011 2012 2013 2014 6/30/2015 2 18.0x 16.0x 14.0x 12.0x 1 8.0x 6.0x 4.0x 2.0x 12.7x 13.4x 12.8x 11.2x 8.1x 7.5x 7.1x 2009 2010 2011 2012 2013 2014 6/30/2015 Average of Medians (9.4x) Average of Medians (10.4x) Page 8 www.mpival.com 8

Public Market Data, cont d Company Guideline 6/30/2015 52 Week Enterprise EV/EBITDA EBITDA Margin Market Cap/Earnings Consensus Growth (4) Ticker Close (2) High Low Value (EV) (3) LTM NFY LTM NFY LTM NFY EBITDA EPS Cable TV AMC Networks Inc. AMCX 81.85 83.78 52.73 8,763 11.5x 11.0x 32.9% 31.4% 19.1x 16.7x 16.3% 21.1% Corus Entertainment Inc. CJR.B 16.67 25.50 16.15 2,289 7.9x 8.3x 34.9% 33.8% 34.9x 88.2x (3.4%) (4.4%) Crown Media Holdings Inc. CRWN 4.52 4.67 2.93 1,931 5.9x NA 76.7% NA NM NA NA NA Discovery Communications, Inc. DISC.A 33.26 44.99 28.72 29,173 11.5x 11.9x 39.7% 37.8% 18.5x 19.5x 2.0% 10.3% Scripps Networks Interactive, Inc. SNI 65.37 86.48 64.47 10,433 8.9x 8.6x 43.9% 40.5% 15.5x 14.6x 7.3% 11.4% Viacom, Inc. VIAB 64.64 89.76 63.11 38,808 9.1x 9.4x 30.9% 30.8% NM 14.8x 1.1% 7.1% Median 9.0x 9.4x 37.3% 33.8% 17.0x 14.8x 2.0% 10.3% Notes: (1) Source: As reported by S&P Capital IQ. (2) Reported in local currency. (3) In millions of local currency. (4) Represents two year analyst estimates. Definitions: Enterprise Value defined by S&P Capital IQ as market cap. + total debt + preferred equity + total minority interest cash and equivalents LTM latest twelve months. EBITDA adjusted earnings before interest, taxes, depreciation and amortization. NFY next fiscal year. EPS earnings per share. NA not available, NM not meaningful. Page 9 www.mpival.com 9

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