Wells Fargo Wireless Auction October 14

October 2, 2014
Equity Research
Broadcast: A Detailed Look At the Incentive Auction
We took a detailed look at spectrum using the FCCs reserve prices. On
10/1, the FCC released an information packet (Incentive Auction Opportunities
For Broadcasters) that is flush with information for those station groups eligible
to participate in the Incentive Auction. This intensely complex document has a
lot of incremental data--the most important to us being i) the FCCs estimated
reserve prices by market, and ii) a partial description of the potential tax
implications. In this note, we summarize the most important aspects of the
broadcast incentive auction as well as the recent FCC document. Perhaps most
valuable is how we use the new data to provide both a total spectrum portfolio
value as well as hidden spectrum value for all publicly traded station groups.
BOTTOM LINE: We found SBGI and NXST have the greatest spectrum
portfolio value as a % of equity and enterprise value; while NXST and
MEG have the highest hidden spectrum value.
Media & Cable
A quick review of the incentive auction: The broadcast incentive auction

originated from the governments National Broadband Plan (2010), which aims to
provide 100MM homes with internet speeds of 100Mbps down by 2020. To do
this, the FCC has been requested to make 500MHz of spectrum available for
broadband use, with 120MHz coming from broadcasters via a voluntary incentive
auction that is comprised of 3 parts: 1) A reverse auction, whereby TV licensees
bid to voluntarily relinquish spectrum in exchange for payments, 2) A forward
auction, whereby wireless suitors bid on that relinquished spectrum, and 3) A
repacking of the TV band so that both TV and wireless spectrum can once again
be contiguous. The FCC still intends to conduct this auction in mid-2015, but we
wouldnt be surprised to see this pushed given the various complexities.
FINALLY--we got the reserve prices! In the information packet, the FCC
provided estimated station reserve prices for 210 DMAs (Designated Market
Areas). Two things here: 1) it sounds like the FCC will eventually have different
reserve prices for each eligible station in every market, and 2) the reserve prices
are NOT based strictly on per-MHz pop valuations like weve seen in wireless
spectrum auctions. As the document states, the FCC used a top-down
methodology that values each station according to its relative interference value
that reflects its footprint and its impact on adjacent stations it overlaps with.
Were still pulling our hair out over the potential tax implications. We
read the FCC document, the IRS letter and way too many sections of the Internal
Revenue Code cover to cover. And while it is sort of clear as to how the potential
gains will be taxed upon both relinquishment of spectrum as well as repacking,
we still dont know how to calculate such gains because WE HAVE NO IDEA
HOW THE IRS IS DETERMINING THE COST BASIS OF THE BROADCAST
SPECTRUM. We certainly dont believe the cost basis should be $0, but given lack
of clarity, we have no choice but to make this assumption until we get more info.
Our station portfolio analysis: We did some cool stuff here! We tried
calculating spectrum values in our 5/17/13 piece: TV: Spectrum Values Provide A
Pretty Nice Floor. To be honest, that was probably more of a theoretical exercise
vs. anything else. In this note, we use REAL reserve prices as well as various tax
rates to provide a more realistic view of spectrum portfolio value as well as
hidden value. Based on our analysis, companies with the GREATEST median
spectrum portfolio value as a % of enterprise value are SBGI (52%), NXST (49%),
and MEG (27%) after a 20% tax on proceeds and companies with the GREATEST
hidden spectrum value are: NXST ($11/sh.), MEG ($4), and TRBAA ($3).
Please see page 21 for rating definitions, important disclosures

and required analyst certifications
All estimates/forecasts are as of 10/02/14 unless otherwise stated.
Wells Fargo Securities, LLC does and seeks to do business with companies
covered in its research reports. As a result, investors should be aware that
the firm may have a conflict of interest that could affect the objectivity of the
report and investors should consider this report as only a single factor in
making their investment decision.
Marci Ryvicker, CFA, CPA, Senior Analyst

( 21 2 ) 2 1 4 -5 0 10 /
m a r c i . r yv i ck e r@ w ell s f a rgo . co m
John Huh, Associate Analyst
( 21 2 ) 2 1 4 -8 0 4 4 /
j o h n . hu h@ w e l l s f a r g o. c o m
Eric Katz, Associate Analyst
( 21 2 ) 2 1 4 -5 0 11 /
e ri c. k atz 1@ w e ll s fa rg o . co m
Stephan Bisson, Associate Analyst
( 21 2 ) 2 1 4 -8 0 3 3 /
st e p han . b i s so n @ w el l sf a rgo. co m
Media & Cable
WELLS FARGO SECURITIES, LLC

EQUITY RESEARCH DEPARTMENT
We took a detailed look at spectrum value using updated information as provided

by the FCC.
On October 1st, the FCC released an information package entitled Incentive Auction Opportunities For Broadcasters
that is flush with information for those station groups eligible to participate in the Incentive Auction.
This intensely complex document was specifically prepared for the FCC by investment firm Greenhill and Co. Inc. and
has a lot of incremental data--the most important to us being i) the FCCs estimated reserve prices by market, and ii) a
partial description of the potential tax implications (we explain why we say partial below).
We read the document(s); and while the FCC is planning to host a call on the specifics at some point on 10/2, we felt
the need to get our initial thoughts out given the number of incoming calls we have received from investors. So, in
this note, we summarize the most important aspects of the broadcast incentive auction as well as the recent FCC
document.
Perhaps most important is that we use the new data to provide both a total spectrum portfolio value as well as
spectrum option value for all publicly traded station groups.
BOTTOM LINE: We found SBGI and NXST have the greatest spectrum portfolio value as a % of equity
and enterprise value; while NXST and MEG have the highest hidden spectrum value.
A quick review of the broadcast incentive auction:

Recall that the broadcast incentive auction originated from the governments National Broadband Plan (2010), which
aims to provide 100MM homes with internet speeds of 100Mbps down by 2020.
To do this, the FCC has been requested to make 500MHz of spectrum available for broadband use, with 120MHz
coming from broadcasters.
The FCC has been given the authority via the JOBS Act (2012) to reclaim this spectrum through a voluntary
incentive auction that is comprised of three parts:
1) A reverse auction in which broadcast television licensees bid to voluntarily relinquish spectrum usage rights in
exchange for payments.
2) A forward auction whereby wireless companies bid on that relinquished spectrum.
3) A repacking of the TV band so that both TV and wireless spectrum can once again be contiguous.
The FCC still intends to conduct this auction in mid-2015, but we wouldnt be surprised to see this pushed to 2016
given the complexities
FINALLY--we got the reserve prices!

One of the most important aspects of this auction that we (and the broadcasters) have been waiting for is the potential
reserve prices (or net proceeds) that the station groups can expect to receive in the reverse auction.
The FCCs document provides just this--for roughly 210 DMAs (Designated Market Areas).
A FEW THINGS HERE:
1) In reading the insane amount of paper we have in front of us, it sounds like the FCC will assign a different reserve
price to each eligible station in each eligible market. However, in this information package, the FCC merely
provides two EXAMPLES for each market--one being the median reserve price for the stations in the market
and one being the maximum reserve price for the best station in the market.
2) Importantly, the reserve prices do NOT seem to be based strictly on per-MHz pop valuations from prior spectrum
auctions (this is how wireless spectrum is valued). Summarized best by Broadcasting & Cable, the FCC employs
a top-down methodology that gives each station a weighted interference value that reflects its footprint and its
impact on adjacent stations it overlaps with. A station with a big footprint and a lot of overlap with other stations
would have a higher interference value--and command a higher value--than one in a more rural area that may

not overlap with many stations or cover as large a number of people. That is because if the FCC doesnt get that
one station with the bigger footprint, it might have to buy three or four stations to achieve the same repacking.
We provide a complete list of the FCCs estimated reserve prices (both median and maximum)
excerpted directly from the Information Package in Appendix 1 on pages 11-15.
As part of Appendix 2 (pages 16-20) we also provide the per-MHz pop valuations implied by the FCCs
estimated reserve prices--which we use to compare to the per-MHZ pop valuations that resulted from
the 2008 wireless spectrum auction (Auction 73).
We still pull our hair out over the potential tax implications.
We read the FCC document, the IRS letter and way too many sections of the Internal Revenue Code cover to cover.
And while it is sort of clear as to how the potential gains will be taxed upon both relinquishment of spectrum as well
as repacking, we still dont know how to calculate such gains because WE HAVE NO IDEA HOW THE IRS IS
DETERMINING THE COST BASIS OF THE BROADAST SPECTRUM.
We certainly dont believe the cost basis should be $0. We do understand that the broadcasters initially received this
spectrum for free. BUT: (i) since that time, 96% of spectrum has changed hands via M&A, providing a pretty clear
basis; and (2) these companies have spent a lot of money in building a business model around the free spectrum,
which should also be taken into account when calculating the cost basis. Unfortunately, the IRS does a pretty poor
job of providing any clarity here, so we really had no choice but to use a $0 cost basis assumption in some of our
calculations below (see page 9). We intend to update our analyses and conclusions once we have more information
(whenever that may be).
Now, onto what we DO know.
The most important thing we learned from the FCC document is that the tax treatment of any sale of spectrum will
be determined by HOW a broadcast owner decides to participate in the auction.
If a broadcaster outrights sells spectrum with no channel sharing or move to VHF, the gain from the sale of such
spectrum will be treated as a long-term capital gain as long as the rights to that spectrum were held for longer than
one year.
If spectrum is relinquished through channel sharing, there are two potential outcomes:
1) In a partnership, the relocating party may qualify for deferral from tax for the portion of the gain associated with
moving to a shared channel.
2) In a cost-sharing arrangement, the gain will be taxed as if it is a straight relinquishment of spectrum (i.e. long
term capital gain if held for one year).
Lastly, if spectrum is relinquished via a move from UHF to VHF, the broadcaster can defer immediate taxation of a
portion of the gain resulting from the relinquishment of existing spectrum rights in exchange for a VHF channel
under the like-kind exchange provisions of the Internal Revenue Code. The proceeds under this option would
constitute boot and any gain attributable to such boot must be reported in gross income.
The last part of the tax document confirms that there will be NO taxation on any reimbursement of repacking/
relocating costs.
Other stuff we
Broadcasters:
learned
from
the
Incentive
Auction
Opportunities
For
The documents begin with an overview of the incentive auction and its relevance--reiterating that this process is
COMPLETELY VOLUNTARY.
A couple of the more interesting parts of this document:
IT IS NOT JUST LARGE MARKET STATIONS that are being targeted for participation. Specifically, the FCC
says that due to the daisy chain nature of interference, stations in mid- to smaller-sized markets will be
valuable in this process. In other words, adjacent markets (regardless of size) may also be needed to help clear
the most congested top markets.

Media & Cable
PARTICIPATION OF OVER 200 BROADCASTERS IS NEEDED (we dont know what happens if the FCC
doesnt hit this target).
Independent studies have estimated that the total auction proceeds (FORWARD AUCTION) could
approach $45B. This assumes 100MHz of spectrum sold for an average of $1.50/MHzPop.
Total net proceeds to the broadcasters COULD approach $38B (although we question how realistic
this is given that the FCC has no intention of allowing station groups to receive a windfall from
this aucti0n). We get to this $38B by subtracting from that $45B above: i) $5B to cover the costs of FirstNet
that are not covered by the H Block and AWS-3 auctions; ii) $1.75B for the TV Broadcaster Relocation Fund; and
iii) $250MM for auction-related costs.
The FCC has a 126MHz clearing target the difference between the 126MHz and the 100MHz that is actually
being sold has to do with guard bands and the duplex gap (buffers between TV and wireless services sharing
the band), which are not available for auctioning.
An overview of prior wireless auctions and recent secondary transactions: The document goes on to
provide an overview of the last auction (Auction 73 in 2008), whereby 62MHz of spectrum in the 700MHz band
(right next to the TV stations) went for $19B, with an average unit price for all blocks of $1.28 per MHz-pop and an
average unit price for paired blocks (most comparable to the TV stations 600MHz band) of $1.35 per MHz pop.
Somewhere in the middle, the FCC highlighted rising spectrum valuations and included a summary of the most recent
transactions (see our chart below).
Major Wireless Spectrum Transactions Over The Last Several Years
Dec. 2010
ATT-Qualcom
700 MHz Band
$1.9 billion
Dec. 2011
Jan. 2013
Verizon-SpectrumCo
AWSBand
$3.6 billion
Verizon-Grain
700 MHz Band
$189 million
June 2013
Jan. 2014
T-Mobile-USCC
AWSBand
$308 million
T-Mobile-USCC
700 MHz Band
$3.3 billion
Source: FCC and Wells Fargo Securities, LLC

Recent Transaction Comps For 700MHz and AWS Spectrum
$4.50
Grain / Verizon
700MHz B Block
$4.08
$4.25 700MHz
$4.00
$4.00 AWStransactions
$3.50
($ / MHz-POP)
$3.00
$2.50
T-Mobile / Verizon
700MHz A Block
$1.85
$2.00
$1.50
700MHz auction
$1.29
AWS-1 auction
$0.68 Verizon / SpectrumCo

$0.52 Verizon / Cox
$0.54
$0.50
$0.00
Feb-05
Jul-06
Nov-07
Mar-09
T-Mobile / USCellular
$0.96
Qualcom / AT&T
$0.85
$1.00
Aug-10
Dec-11
May-13
Sep-14

As the FCC states, MHz-POP unit prices for spectrum licenses have increased at a 6% CAGR over auction prices, or
approximately 33% over a five-year period IF WE WERE TO APPLY THAT 6% CAGR SINCE THE 2008
AUCTION, WE WOULD GET AN AVERAGE PER MHZ POP VALUE OF $2.03 BY 2015 (this compares
to the FCCs current target valuation of $1.50/MHzPop).
Ways in which the broadcast stations can participate in the reverse auction: The document goes on to
remind us of the various ways that the broadcasters can participate in the reverse auction--we summarize these here,
as this is a question that comes up often from the investment community.
1) A station can relinquish its entire 6MHz channel and go off the air
This would result in the highest level of compensation.
A broadcaster has up to 3 months after it receives proceeds to cease operations
2) A broadcaster can CHANNEL SHARE by relinquishing its entire 6MHz channel and negotiate a commercial
arrangement with another broadcaster to share channels/facilities and stay on the air (by the way, this is
explicitly why we do NOT think SSAs are going away--Shared Service Agreements (SSAs) are needed to channel
share).
This allows broadcasters to remain on the air while receiving the same level of compensation as in (1) above.
Each shared station remains a primary FCC licensee with all current licensee rights ESPECIALLY MUST
CARRY
Those that channel share must vacate the relinquished channel within 3 months of receiving compensation
3) A broadcaster can MOVE TO A VHF station by relinquishing its 6MHZ UHF station in exchange for another
channel
Broadcasters will retain must carry rights on their new channel
Broadcasters choosing this option will have up to 39 months after the Incentive Auction ends to move to the
new channel.
4) There is a FOURTH option that we did NOT know about (maybe we missed it in earlier documents--who knows?).
Here, a HIGH VHF broadcaster can move to a LOWER VHF channel.
Broadcasters will retain must carry rights on their new channel
Broadcasters choosing this option will have up to 39 months after the Incentive Auction ends to move to the
new channel.
A few things to remember here: (1) Every channel is comprised of 6MHz of spectrum; but (2) NOT
EVERY CHANNEL has the right kind of spectrum. The FCC is primarily looking for FULL POWER
UHF, some HIGH VHF, and Class A stations--all of which must have been licensed as of February
22, 2012.
The mechanics of the reverse and forward auction proceedings: A big portion of this document describes
the specific mechanics of both the reverse and the forward auctions. We re-print both sections below.

Media & Cable

Descripti0n of Reverse Auction Proceeding
The Reverse AuctionWill Use A DescendingClock Format to Make Participation Easy And Transparent For Broadcasters
Illustrative Reverse Auction Example Where 2 StationsAre Needed
(Assumestechnically identical stations)
Round
Bid Price
Stations Accepting Bid Price
Stations in Excess of Clearing Target
(1)
$$$$$$
3 stations
(2)
$$$$$
1 station
(3)
$$$$
1 station
(4)
$$$
0 station
Dropped out participants

repacked into pre-auction band
Market clears / dropped out participants

repacked into pre-auction band
(1)
i. The Reverse Auction begins with a Clearing Target of 2

stations and an Opening Price of $$$$$$
(2) i. The second round begins with a price of $$$$$

ii. Only 3 stations accept this price
ii. 5 stations accept this Opening Price
iii. Since there is 1 station above the Clearing Target, the

market does not clear and the new round of bidding
begins with a lower price
iii. Since there are 3 stations above the Clearing Target,

the market does not clear and the new round of bidding
begins with a lower bid price
(3)
i. The third round begins with a price of $$$$
i. The fourth round begins with a price of $$$
ii. All 3 remaining stations still bid to accept this bid price
ii. 2 stations accept this price
iii. Since there is 1 station above the Clearing Target, the

market does not clear and the new round of bidding
begins with a lower price
iii. Since there are no stations above the Clearing Target,

the current stage of the Reverse Auction ends
(4)


Description of Forward Auction Proceeding
The Forward Auction Is Designed To Be Efficient And Fast To Draw In Maximum Participation From WirelessProviders
Illustrative Forward Auction Example With 6 Blocks For Sale

Round Price/ Block
Bidder 1 Bidder 2
Excess Demand
(4)
$$$$$
2 Blocks 4 Blocks
0 Blocks --- Prices set
(3)
$$$$
3 Blocks 4 Blocks
1 Block
(2)
$$$
4 Blocks 4 Blocks
2 Blocks
(1)
$$
6 Blocks 6 Blocks
6 Blocks
(1)
(3)
i. The Forward Auction begins with 6 blocks for sale

and an opening Bid Price of $$
(2) i. The round begins with a Bid Price of $$$
ii. Bidder 1 and Bidder 2 each demand 6 blocks
ii. Bidder 1 and Bidder 2 each reduce their demand by 2

blocks
iii. Since there are 6 blocks of excess demand, a new

round begins with a higher price per block
iii. Since there are 2 blocks of excess demand, a new

i. The round begins with a Bid Price of $$$$
(4)
i. The round begins with a Bid Price of $$$$$
ii. Bidder 1 reduces its demand by 1 block
ii. Bidder 1 reduces its demand by 1 additional block
iii. Since there is 1 block of excess demand, a new

iii. Since there is no excess demand for blocks, the

current stage of the Forward Auction ends

Integration of the reverse and forward auction proceedings: There is also an explanation as to how the
FCC intends to integrate the reverse and forward auctions. Here are the specific steps as outlined in the information
packet:
1) Prior to the incentive auction, the FCC will determine an initial spectrum clearing target based on the number of
broadcasters willing to bid at opening prices.
2) The reverse auction bidding process will determine the total amount of incentive payments to broadcasters
required to clear that target level of spectrum.
3) The forward auction bidding process will proceed subsequent to the reverse auction and will determine how much
wireless providers are willing to pay for spectrum licenses corresponding to that target level of spectrum.
If forward auction proceeds cover the reverse auction bids as well as fund the Relocation Fund and satisfy
other requirements of the Final Stage Rule, then the incentive auction will close at that spectrum clearing
target.
If forward auction proceeds DO NOT cover the reverse auction bids, etc., then the clearing target will be
reduced and the reverse and forward auction bidding process will be repeated until the Final Stage Rule is
met (this Final Stage Rule is very technical--we wont reprint it here because our eyes are bleeding but you
can find it by clicking this link: http://www.fcc.gov/document/fcc-adopts-rules-first-ever-incentive-auction0).
Repacking the TV band upon auction completion: One of the final parts of the document describes the
repacking process for those stations that remain in existence post auction close. Remember that the key to success for
the forward auction is to ultimately provide wireless companies with CONTIGUOUS spectrum, which means ALL
broadcasters--whether they participate in the auction or not--are likely to be moved, or repacked. As part of the
JOBS Act, the FCC has earmarked $1.75B for reimbursement of relocation costs.
Media & Cable

Results from the L.A. channel sharing test: Last but not least, the FCCs document sheds light on the results
from the Channel Sharing trial that had been held in Los Angeles in early 2014. If you recall, PBS affiliate KLCS and
Spanish Language affiliate KJLA tested the technical feasibility of having two different licensees share a single 6MHz
channel. Data from the trial suggested (among other things):
Channel sharing is feasible--all TVs and tuners received and correctly parsed the required information;
One HD stream is possible with numerous SD programs (the trial tested 1 HD and up to 7SD streams); and
It is technically feasible to have two 720p high def streams combine with 2 SD program streams
WE USED THE FCCS RESERVE PRICES TO CALCULATE SPECTRUM PORTFOLIO

VALUES:
One of the questions we anticipate getting from the investment community is what are the publicly traded TV station
groups worth from a spectrum portfolio perspective?
We tried to answer this once already--in our note dated May 17, 2013 and entitled TV: Spectrum Values Provide A
Pretty Nice Floor. But in that analysis, we used the MHz-pop prices from the 2008 wireless auction to come up with
theoretical values. We also neglected to tax-effect any potential proceeds.
In this analysis, however, we use real information as provided by the FCC--specifically the reserve price as shown in
the information package and which we reprint in Appendix 1 on pages 11-15).
A few things to point out to help you understand how we came up with our calculations:
We use ONLY UHF full power and Class A stations--we give $0 value to VHF stations;
We include all shared stations whether the FCC license is owned or not;
We provide a tax-adjusted number under three different scenarios: 0% (to show the pure amount of proceeds),
20% and 40% (quite frankly, these were sort of random);
Our cost basis is unfortunately $0 given lack of clarity from the IRS; and
We use both the median and maximum reserve prices as provided by the FCC staff (again in Appendix 1 on page 1115)
Once we calculated the specific portfolio values, we compared the resulting figures to each publicly traded companys
current equity AND enterprise value (the EV is something we didnt do in our May 2013 note but should have).
ACCORDING TO OUR CALCULATIONS, companies with the GREATEST spectrum portfolio values
(on a 20% tax-adjusted rate) as a PERCENT OF CURRENT EQUITY AND ENTERPRISE VALUE
INCLUDE: SBGI, NXST, MEG, and GTN; while the diversifieds have the LOWEST spectrum portfolio
values as a percent of current equity and enterprise value (no surprise here).
We do provide a caveat from the FCCs published documents--The reserve prices are estimated high
payouts that illustrate the economic potential of the auction. In the actual auction, prices will be bid
down in many markets and payouts to many winning bidders will be lower as a result. On a
nationwide basis, it is anticipated that forward auction revenues will exceed the winning bid
amounts and the other requirements specified by the final stage rule. Those additional revenues will
be deposited in the Public Safety Trust to advance the financial goals identified by Congress in the
Spectrum Act.

FCC Median And Maximum Spectrum Valuations as a % of Equity Value And Enterprise Value
(figures in millions, except per share and percentage data)
Ticker
SBGI
NXST
MEG
GTN
MDP
TRBAA
CBS
GCI
FOXA
CMCSA
DIS
FCC Med.
Spec. Val.
$3,681
$1,428
$1,471
$466
$636
$2,501
$2,909
$602
$1,786
$3,322
$146
FCC Max.
Spec. Val.
$5,134
$2,016
$2,022
$657
$920
$3,503
$4,077
$985
$2,276
$4,633
$160
Diluted sh
O/S (Q2'14)
98
32
137
58
37
94
581
232
2,228
2,628
1,728
Med. Val.
/ Sh
$37.61
$44.72
$10.74
$7.99
$17.29
$26.69
$5.01
$2.59
$0.80
$1.26
$0.08
Max. Val.
/ Sh
$52.46
$63.13
$14.76
$11.27
$25.01
$37.39
$7.02
$4.24
$1.02
$1.76
$0.09
10/1/2014
Close Price
$25.79
$39.68
$12.72
$7.71
$42.33
$63.06
$52.81
$29.21
$33.70
$52.93
$87.49
Enterprise
Val.
$5,715
$2,335
$4,399
$1,541
$2,235
$8,839
$34,124
$10,707
$88,727
$181,949
$163,148
Med. Spec. Val.

% of Price
146%
113%
84%
104%
41%
42%
9%
9%
2%
2%
0%
Max. Spec. Val.

% of Price
203%
159%
116%
146%
59%
59%
13%
15%
3%
3%
0%
Med. Spec. Val.

% of EV
64%
61%
33%
30%
28%
28%
9%
6%
2%
2%
0%
Max. Spec. Val.

% of EV
90%
86%
46%
43%
41%
40%
12%
9%
3%
3%
0%
Note: spectrum valuations are pro forma for all announced acquisitions; Source: TvB, BIA, Public FCC Documents,
FactSet and Wells Fargo Securities, LLC estimates
20% Tax Effected FCC Median And Maximum Spectrum Valuations as a % of Equity Value And
Enterprise Value
Ticker
SBGI
NXST
MEG
GTN
MDP
TRBAA
CBS
GCI
FOXA
CMCSA
DIS
20% Tax-effected
FCC Med.
FCC Max.
Spec. Val.
Spec. Val.
$2,945
$4,107
$1,142
$1,613
$1,177
$1,618
$373
$526
$509
$736
$2,001
$2,802
$2,327
$3,262
$482
$788
$1,429
$1,821
$2,658
$3,706
$117
$128
Diluted sh
O/S (Q2'14)
98
32
137
58
37
94
581
232
2,228
2,628
1,728
Med. Val.
/ Sh
$30.09
$35.78
$8.59
$6.39
$13.83
$21.36
$4.01
$2.07
$0.64
$1.01
$0.07
Max. Val.
/ Sh
$41.97
$50.51
$11.81
$9.01
$20.01
$29.91
$5.61
$3.40
$0.82
$1.41
$0.07
10/1/2014
Close Price
$25.79
$39.68
$12.72
$7.71
$42.33
$63.06
$52.81
$29.21
$33.70
$52.93
$87.49
Enterprise
Val.
$5,715
$2,335
$4,399
$1,541
$2,235
$8,839
$34,124
$10,707
$88,727
$181,949
$163,148
Med. Spec. Val.

% of Price
117%
90%
68%
83%
33%
34%
8%
7%
2%
2%
0%
Max. Spec. Val.

% of Price
163%
127%
93%
117%
47%
47%
11%
12%
2%
3%
0%
Med. Spec. Val.

% of EV
52%
49%
27%
24%
23%
23%
7%
4%
2%
1%
0%
Max. Spec. Val.

% of EV
72%
69%
37%
34%
33%
32%
10%
7%
2%
2%
0%
40% Tax Effected FCC Median And Maximum Spectrum Valuations as a % of Equity Value And
Enterprise Value
Ticker
SBGI
NXST
MEG
GTN
MDP
TRBAA
CBS
GCI
FOXA
CMCSA
DIS
40% Tax-effected
FCC Med.
FCC Max.
Spec. Val.
Spec. Val.
$2,209
$3,080
$857
$1,210
$883
$1,213
$280
$394
$382
$552
$1,501
$2,102
$1,745
$2,446
$361
$591
$1,072
$1,366
$1,993
$2,780
$88
$96
Diluted sh
O/S (Q2'14)
98
32
137
58
37
94
581
232
2,228
2,628
1,728
Med. Val.
/ Sh
$22.57
$26.83
$6.44
$4.79
$10.38
$16.02
$3.00
$1.56
$0.48
$0.76
$0.05
Max. Val.
/ Sh
$31.48
$37.88
$8.85
$6.76
$15.01
$22.43
$4.21
$2.55
$0.61
$1.06
$0.06
10/1/2014
Close Price
$25.79
$39.68
$12.72
$7.71
$42.33
$63.06
$52.81
$29.21
$33.70
$52.93
$87.49
Enterprise
Val.
$5,715
$2,335
$4,399
$1,541
$2,235
$8,839
$34,124
$10,707
$88,727
$181,949
$163,148
Med. Spec. Val.

% of Price
88%
68%
51%
62%
25%
25%
6%
5%
1%
1%
0%
Max. Spec. Val.

% of Price
122%
95%
70%
88%
35%
36%
8%
9%
2%
2%
0%
Med. Spec. Val.

% of EV
39%
37%
20%
18%
17%
17%
5%
3%
1%
1%
0%
Max. Spec. Val.

% of EV
54%
52%
28%
26%
25%
24%
7%
6%
2%
2%
0%
WE USED THE FCCS RESERVE PRICES TO CALCULATE EACH GROUPS

HIDDEN SPECTRUM VALUE
Up until now, weve had a hard time giving the broadcasters credit for any hidden value when it comes to spectrum
given a) they USE this spectrum to run their day-to-day business; and b) while they dont need ALL 6MHz of every
channel to broadcast an HD stream, its hard to figure out who actually has excess and where such excess might be
located.
Well, it turns out that we were probably a little too conservative here. We say this because channel sharing seems to
be a real strategy for a lot of these groups--and one that some (such as SBGI) are already pursuing.
Just to remind you--each channel is comprised of 6MHz of spectrum, but only 3MHz is really needed to broadcast an
HD feed over the air. Therefore, in channel sharing, two stations are essentially put together with one on a primary
feed and the other on a secondary feed (also referred to as a multi-cast). In technical terms (and from the FCC

Media & Cable
website), stations that share employ a single channel and transmission facility but each continue to be licensed
separately, retain its original call sign, retain all the rights pertaining to an FCC license, and remain subject to all of
the FCCs rules, policies, and obligations.
We tried our hand at determining each broadcasters hidden spectrum value by using this channel sharing
philosophy. In essence, we assume that each broadcaster will sell ONE of their duopoly channels back to the FCC for
cash; while maintaining all of the programming (and hence EBITDA) via multi-cast on that remaining channel.
In these calculations, we used almost all of the same assumptions that underlie our spectrum portfolio value analysis
above. The big difference, however, is two-fold. In our hidden spectrum value analysis, we actually had to INCLUDE
the VHF stations, as these are viable options for channel sharing; but we had to EXCLUDE any channel that is already
being used to multi-cast another channels programming.
ACCORDING TO OUR CALCULATIONS, companies with the GREATEST HIDDEN SPECTRUM VALUE
include: NXST, MEG, TRBAA and MDP; while companies with the LEAST HIDDEN SPECTRUM
VALUE include: CMCSA, FOXA, GTN (we remind you that GTN already multi-casts on almost all of
their stations), and DIS.
Median and Maximum Hidden Spectrum Value per Share
Ticker
NXST
MEG
TRBAA
MDP
SBGI
CBS
GCI
CMCSA
FOXA
GTN
DIS
0% Tax Effected
Med. Val.
Max. Val.
/ Sh
/ Sh
$14.03
$20.73
$4.55
$6.85
$3.76
$5.85
$3.26
$4.49
$3.16
$4.18
$2.68
$3.84
$0.81
$1.31
$0.52
$0.73
$0.46
$0.55
$0.02
$0.03
$0.00
$0.00
20% Tax Effected

Med. Val.
Max. Val.
/ Sh
/ Sh
$11.22
$16.59
$3.64
$5.48
$3.01
$4.68
$2.61
$3.59
$2.53
$3.34
$2.15
$3.07
$0.64
$1.04
$0.42
$0.58
$0.37
$0.44
$0.01
$0.03
$0.00
$0.00
40% Tax Effected

Med. Val.
Max. Val.
/ Sh
/ Sh
$8.42
$12.44
$2.73
$4.11
$2.25
$3.51
$1.96
$2.69
$1.89
$2.51
$1.61
$2.31
$0.48
$0.78
$0.31
$0.44
$0.28
$0.33
$0.01
$0.02
$0.00
$0.00
and Wells Fargo Securities, LLC estimates
10

Appendix 1:
FCC Estimated Auction Reserve Prices by DMA
(figures in millions of dollars, except for DMA ranking data)
Full Power
Class A
DMA Rank
DMA
Maximum
Medium
Maximum
Medium
New York, NY
490
410
360
280
Los Angeles, CA
570
340
370
310
Chicago, IL
130
120
120
100
Philadelphia, PA
400
230
180
110
Dallas-Ft. Worth, TX
67
53
58
50
San Francisco-Oakland-San Jose, CA
140
110
92
70
Boston, MA
140
93
77
77
Washington, DC
140
130
98
67
Atlanta, GA
91
65
54
51
10
Houston, TX
52
45
38
36
11
Detroit, MI
170
110
58
46
12
Phoenix, AZ
36
23
22
10
13
Seattle-Tacoma, WA
95
36
14
Tampa-St Petersburg-Sarasota, FL
71
60
43
39
15
Minneapolis - St. Paul, MN
32
20
18
18
16
Miami - Ft. Lauderdale, FL
80
78
76
70
17
Denver, CO
33
28
22
10
18
Orlando-Daytona Beach-Melbourne, FL
85
68
67
44
19
Cleveland-Akron, OH
130
72
26
18
20
Sacramento-Stockton-Modesto, CA
130
94
55
43
21
St. Louis, MO
21
20
13
11
22
Portland, OR
24
18
15
14
23
Pittsburgh, PA
46
40
38
21
24
Raleigh-Durham, NC
51
47
26
20
25
Charlotte, NC
54
44
25
20
26
Indianapolis, IN
42
36
28
21
27
Baltimore, MD
180
160
79
79
28
San Diego, CA
250
200
230
140
29
Nashville, TN
30
20
12
11
30
Hartford-New Haven, CT
280
170
77
63
31
Kansas City, KS-MO
14
14
32
Columbus, OH
41
36
20
14
33
Salt Lake City, UT
12
12
11
34
Milwaukee, WI
68
53
32
30
35
Cincinnati, OH
44
42
35
35
36
San Antonio, TX
35
29
22
20
37
Greenville-Spartanburg, SC-Asheville, NC
57
36
38
West Palm Beach-Ft. Pierce, FL
100
93
47
29
39
Grand Rapids-Kalamazoo-Battle Creek, MI
70
39
20
14
40
Austin, TX
48
36
24
12
41
Oklahoma City, OK
17
13
13
12
42
Las Vegas, NV
15
12
13
11
43
Harrisburg-Lancaster-Lebanon-York, PA
180
130
44
Birmingham, AL
33
25
20
12
45
Norfolk-Portsmouth-Newport News, VA
28
24
16
11
46
Greensboro-High Point-Winston Salem, NC
60
45
47
Albuquerque-Santa Fe, NM
48
Jacksonville, FL
27
23
16
15
49
Louisville, KY
31
25
18
11
50
Memphis, TN
13
11
10
Note: blank values were not disclosed; Source: Public FCC Documents, Wells Fargo Securities, LLC
11

Media & Cable
Appendix 1 (continued):
Full Power
Class A
DMA Rank
DMA
Maximum
Medium
Maximum
Medium
51
New Orleans, LA
18
15
13
11
52
Buffalo, NY
73
46
53
Providence, RI-New Bedford, MA
160
110
56
56
54
Wilkes Barre-Scranton, PA
150
140
56
55
Fresno-Visalia, CA
30
26
17
16
56
Little Rock-Pine Bluff, AR
16
12
57
Richmond-Petersburg, VA
44
39
58
Albany-Schenectady-Troy, NY
81
37
110
10
59
Mobile, AL-Pensacola, FL
15
12
10
10
60
Tulsa, OK
19
14
11
10
14
61
Knoxville, TN
27
19
62
Ft. Myers-Naples, FL
50
35
63
Lexington, KY
31
20
64
Dayton, OH
53
48
65
Charleston-Huntington, WV
23
16
66
Roanoke-Lynchburg, VA
25
22
12
12
67
Wichita - Hutchinson, KS
68
Flint-Saginaw-Bay City, MI
100
45
69
Honolulu, HI
10
70
Green Bay-Appleton, WI
13
10
71
Tucson, AZ
38
20
15
11
72
Des Moines-Ames, IA
13
73
Spokane, WA
74
Omaha, NE
75
Springfield, MO
11
76
Toledo, OH
100
55
38
38
77
Columbia, SC
41
17
78
Rochester, NY
34
30
20
16
79
Huntsville-Decatur-Florence, AL
26
22
18
16
80
Portland-Auburn, ME
37
22
81
Paducah-Cape Girardeau-Harrisburg-Mt Vernon
17
82
Shreveport, LA
16
13
83
Madison, WI
40
35
12
12
84
Champaign-Springfield-Decatur, IL
35
19
85
Syracuse, NY
34
24
10
86
Harlingen-Weslaco-Brownsville-McAllen, TX
32
21
28
13
87
Chattanooga, TN
62
33
21
18
88
Waco-Temple-Bryan, TX
63
47
15
14
89
Colorado Springs-Pueblo, CO
25
22
90
Cedar Rapids-Waterloo-Iowa City-Dubuque, IA
21
13
7
91
El Paso, TX
92
Savannah, GA
11
93
Baton Rouge, LA
24
18
14
94
Jackson, MS
17
11
95
Charleston, SC
14
10
10
96
South Bend-Elkhart, IN
65
56
97
Tri-Cities, TN-VA
32
21
13
11
98
Burlington, VT-Plattsburgh, NY
58
17
99
Greenville-New Bern-Washington, NC
33
22
100
Davenport, IA-Rock Island-Moline, IL
22
20
12

Full Power
Class A
DMA Rank
DMA
Maximum
Medium
Maximum
101
Ft. Smith-Fayetteville-Springdale-Rogers, AR
14
10
Medium
5
102
Myrtle Beach-Florence, SC
32
25
21
21
103
Johnstown-Altoona, PA
38
26
23
12
104
Evansville, IN
16
10
10
105
Lincoln-Hastings-Kearney, NE
14
106
Tallahassee, FL-Thomasville, GA
10
107
Reno, NV
48
17
108
Tyler-Longview, TX
34
24
109
Ft. Wayne, IN
33
31
110
Boise, ID
111
Sioux Falls-Mitchell, SD
112
Augusta, GA
25
17
113
Youngstown, OH
95
90
114
Springfield-Holyoke, MA
120
120
32
32
115
Lansing, MI
84
62
116
Fargo-Valley City, ND
117
Peoria-Bloomington, IL
30
17
118
Macon, GA
40
19
119
Traverse City-Cadillac, MI
28
120
Montgomery, AL
18
13
121
Eugene, OR
21
122
Lafayette, LA
16
14
123
Santa Barbara-Santa Maria-San Luis Obispo, CA
120
30
59
124
Yakima-Pasco-Richland-Kennewick, WA
125
Monterey-Salinas, CA
79
72
36
31
126
Columbus, GA
38
18
127
Bakersfield, CA
80
31
28
15
128
La Crosse-Eau Claire, WI
18
13
129
Corpus Christi, TX
16
11
0
12
130
Amarillo, TX
131
Wilmington, NC
18
17
132
Chico-Redding, CA
18
16
22
133
Columbus-Tupelo-West Point, MS
13
11
134
Topeka, KS
18
135
Wausau-Rhinelander, WI
15
136
Rockford, IL
55
45
137
Monroe, LA-El Dorado, AR
11
138
Columbia-Jefferson City, MO
139
Duluth, MN-Superior, WI
140
Medford-Klamath Falls, OR
141
Beaumont-Port Arthur, TX
17
14
142
Salisbury, MD
55
50
143
Lubbock, TX
144
Wichita Falls, TX -Lawton, OK
15
12
145
Minot-Bismarck-Dickinson, ND
146
Anchorage, AK
147
Sioux City, IA
12
148
Palm Springs, CA
180
100
170
26
149
Erie, PA
41
29
150
Odessa-Midland, TX
13

Media & Cable
Full Power
Class A
DMA Rank
DMA
Maximum
Medium
151
Albany, GA
14
10
152
Joplin, MO-Pittsburg, KS
12
153
Rochester, MN-Mason City, IA-Austin, MN
15
154
Panama City, FL
15
155
Terre Haute, IN
22
17
Maximum
Medium
19
10
156
Bangor, ME
157
Wheeling, WV- Steubenville, OH
59
53
158
Bluefield-Beckley-Oak Hill, WV
16
15
159
Binghamton, NY
40
16
160
Biloxi-Gulfport, MS
16
14
161
Sherman, TX - Ada, OK
61
40
162
Idaho Falls-Pocatello, ID
163
Gainesville, FL
31
28
28
12
164
Missoula, MT
165
Abilene-Sweetwater, TX
10
165
Yuma, AZ-El Centro, CA
11
167
Hattiesburg-Laurel, MS
15
13
168
Billings, MT
169
Clarksburg-Weston, WV
31
15
170
Quincy, IL-Hannibal, MO-Keokuk, IA
171
Utica, NY
52
14
172
Dothan, AL
12
173
Rapid City, SD
174
Elmira, NY
175
Lake Charles, LA
25
15
176
Watertown, NY
17
16
17
177
Jackson, TN
13
13
178
Harrisonburg, VA
64
31
179
Alexandria, LA
10
180
Marquette, MI
181
Jonesboro, AR
12
12
182
Bowling Green, KY
26
11
183
Charlottesville, VA
39
27
22
22
184
Laredo, TX
185
Grand Junction-Montrose, CO
186
Meridian, MS
13
10
187
Lima, OH
36
29
15
15
188
Butte-Bozeman, MT
189
Lafayette, IN
52
52
190
Greenwood-Greenville, MS
191
Great Falls, MT
192
Twin Falls, ID
193
Bend, OR
194
Parkersburg, WV
16
16
1
0
195
Eureka, CA
196
Cheyenne, WY-Scottsbluff, NE
35
197
Casper-Riverton, WY
198
San Angelo, TX
199
Mankato, MN
14
14
200
St. Joseph, MO
15
14
14

Full Power
Class A
DMA Rank
DMA
Maximum
Medium
201
Ottumwa, IA-Kirksville, MO
202
Fairbanks, AK
203
Victoria, TX
20
19
204
Zanesville, OH
32
32
205
Helena, MT
206
Presque Isle, ME
207
Juneau, AK
208
North Platte, NE
209
Alpena, MI
210
Glendive, MT
Maximum
Medium
15

Media & Cable
Appendix 2:
FCC Estimated Auction Reserve Prices And MHz-Pops v. 2008 Auction MHz-Pops by DMA
DMA Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
DMA
New York, NY
Los Angeles, CA
Chicago, IL
Philadelphia, PA
Dallas-Ft. Worth, TX
San Francisco-Oakland-San Jose, CA
Boston, MA
Washington, DC
Atlanta, GA
Houston, TX
Detroit, MI
Phoenix, AZ
Seattle-Tacoma, WA
Tampa-St Petersburg-Sarasota, FL
Minneapolis - St. Paul, MN
Miami - Ft. Lauderdale, FL
Denver, CO
Orlando-Daytona Beach-Melbourne, FL
Cleveland-Akron, OH
Sacramento-Stockton-Modesto, CA
St. Louis, MO
Portland, OR
Pittsburgh, PA
Raleigh-Durham, NC
Charlotte, NC
Indianapolis, IN
Baltimore, MD
San Diego, CA
Nashville, TN
Hartford-New Haven, CT
Kansas City, KS-MO
Columbus, OH
Salt Lake City, UT
Milwaukee, WI
Cincinnati, OH
San Antonio, TX
Greenville-Spartanburg, SC-Asheville, NC
West Palm Beach-Ft. Pierce, FL
Grand Rapids-Kalamazoo-Battle Creek, MI
Austin, TX
Oklahoma City, OK
Las Vegas, NV
Harrisburg-Lancaster-Lebanon-York, PA
Birmingham, AL
Norfolk-Portsmouth-Newport News, VA
Greensboro-High Point-Winston Salem, NC
Albuquerque-Santa Fe, NM
Jacksonville, FL
Louisville, KY
Memphis, TN
2013 Coverage (P2+)

19.61
16.74
9.14
7.50
6.88
6.60
5.86
6.07
6.06
6.09
4.57
4.69
4.43
4.23
4.25
4.29
3.81
3.55
3.53
3.80
3.00
2.93
2.65
2.82
2.83
2.68
2.71
2.91
2.50
2.45
2.28
2.27
2.73
2.18
2.21
2.36
2.01
1.88
1.83
1.76
1.74
1.90
1.79
1.74
1.76
1.66
1.72
1.62
1.62
1.68
Maximum
490
570
130
400
67
140
140
140
91
52
170
36
95
71
32
80
33
85
130
130
21
24
46
51
54
42
180
250
30
280
14
41
12
68
44
35
57
100
70
48
17
15
180
33
28
60
9
27
31
13
Full Power
MHz/Pop
Medium
$4.16
410
$5.67
340
$2.37
120
$8.89
230
$1.62
53
$3.54
110
$3.98
93
$3.84
130
$2.50
65
$1.42
45
$6.20
110
$1.28
23
$3.58
36
$2.80
60
$1.26
20
$3.11
78
$1.44
28
$3.99
68
$6.14
72
$5.70
94
$1.17
20
$1.36
18
$2.89
40
$3.01
47
$3.18
44
$2.61
36
$11.08
160
$14.33
200
$2.00
20
$19.07
170
$1.02
14
$3.01
36
$0.73
12
$5.19
53
$3.31
42
$2.47
29
$4.72
36
$8.89
93
$6.39
39
$4.53
36
$1.63
13
$1.32
12
$16.76
130
$3.16
25
$2.66
24
$6.03
45
$0.87
5
$2.77
23
$3.19
25
$1.29
11
MHz/Pop
$3.48
$3.38
$2.19
$5.11
$1.28
$2.78
$2.65
$3.57
$1.79
$1.23
$4.01
$0.82
$1.36
$2.37
$0.78
$3.03
$1.23
$3.19
$3.40
$4.12
$1.11
$1.02
$2.51
$2.77
$2.59
$2.24
$9.85
$11.46
$1.33
$11.58
$1.02
$2.64
$0.73
$4.05
$3.16
$2.05
$2.98
$8.26
$3.56
$3.40
$1.24
$1.05
$12.11
$2.40
$2.28
$4.52
$0.48
$2.36
$2.57
$1.09
2008 Auction
MHz/Pop
$4.57
$2.58
$9.19
$6.05
$2.13
$5.06
$5.71
$4.81
$5.53
$3.69
$3.54
$6.04
$7.79
$4.23
$4.90
$5.00
$1.93
$5.07
$2.54
$3.95
$4.25
$2.16
$3.13
$3.62
$4.85
$3.73
$3.99
$5.24
$4.42
$4.44
$3.65
$1.40
$3.37
$6.17
$1.88
$2.93
$1.44
$1.99
$3.94
$2.66
$7.32
$4.98
$0.91
$2.22
$3.39
$4.41
$1.05
$2.28
$2.93
$2.46
Source: TvB, BIA, Public FCC Documents, and Wells Fargo Securities, LLC estimates
16
FCC (Max) v. 2008 Auction

MHz/Pop Difference
($0.41)
$3.09
($6.82)
$2.84
($0.51)
($1.52)
($1.73)
($0.97)
($3.02)
($2.27)
$2.66
($4.76)
($4.22)
($1.43)
($3.65)
($1.89)
($0.48)
($1.08)
$3.60
$1.75
($3.08)
($0.80)
($0.24)
($0.61)
($1.67)
($1.12)
$7.09
$9.09
($2.42)
$14.63
($2.63)
$1.61
($2.64)
($0.98)
$1.43
($0.46)
$3.28
$6.90
$2.45
$1.87
($5.69)
($3.67)
$15.85
$0.94
($0.73)
$1.62
($0.18)
$0.49
$0.26
($1.17)
FCC (Med) v. 2008 Auction

MHz/Pop Difference
($1.09)
$0.80
($7.00)
($0.94)
($0.85)
($2.28)
($3.06)
($1.24)
($3.74)
($2.46)
$0.47
($5.22)
($6.44)
($1.87)
($4.12)
($1.96)
($0.70)
($1.88)
$0.86
$0.17
($3.14)
($1.14)
($0.62)
($0.84)
($2.26)
($1.50)
$5.86
$6.22
($3.08)
$7.14
($2.63)
$1.24
($2.64)
($2.12)
$1.28
($0.88)
$1.54
$6.28
($0.38)
$0.74
($6.08)
($3.93)
$11.20
$0.18
($1.11)
$0.11
($0.56)
$0.08
($0.36)
($1.37)

DMA Rank
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
DMA
New Orleans, LA
Buffalo, NY
Providence, RI-New Bedford, MA
Wilkes Barre-Scranton, PA
Fresno-Visalia, CA
Little Rock-Pine Bluff, AR
Richmond-Petersburg, VA
Albany-Schenectady-Troy, NY
Mobile, AL-Pensacola, FL
Tulsa, OK
Knoxville, TN
Ft. Myers-Naples, FL
Lexington, KY
Dayton, OH
Charleston-Huntington, WV
Roanoke-Lynchburg, VA
Wichita - Hutchinson, KS
Flint-Saginaw-Bay City, MI
Honolulu, HI
Green Bay-Appleton, WI
Tucson, AZ
Des Moines-Ames, IA
Spokane, WA
Omaha, NE
Springfield, MO
Toledo, OH
Columbia, SC
Rochester, NY
Huntsville-Decatur-Florence, AL
Portland-Auburn, ME
Paducah-Cape Girardeau-Harrisburg-Mt Vernon
Shreveport, LA
Madison, WI
Champaign-Springfield-Decatur, IL
Syracuse, NY
Harlingen-Weslaco-Brownsville-McAllen, TX
Chattanooga, TN
Waco-Temple-Bryan, TX
Colorado Springs-Pueblo, CO
Cedar Rapids-Waterloo-Iowa City-Dubuque, IA
El Paso, TX
Savannah, GA
Baton Rouge, LA
Jackson, MS
Charleston, SC
South Bend-Elkhart, IN
Tri-Cities, TN-VA
Burlington, VT-Plattsburgh, NY
Greenville-New Bern-Washington, NC
Davenport, IA-Rock Island-Moline, IL
2013 Coverage (P2+)

1.59
1.47
1.48
1.39
1.81
1.34
1.35
1.26
1.28
1.29
1.24
1.16
1.15
1.18
1.07
1.03
1.11
1.08
1.25
1.05
1.07
1.02
1.01
1.02
0.98
0.98
0.45
0.95
0.94
0.90
0.91
0.93
0.89
0.88
0.90
1.23
0.87
0.89
0.84
0.81
0.98
0.83
0.83
0.84
0.77
0.81
0.73
0.74
0.72
0.71
Maximum
18
73
160
150
30
16
44
81
15
19
27
50
31
53
23
25
8
100
10
13
38
13
7
9
11
100
41
34
26
37
17
16
40
35
34
32
62
63
25
21
9
11
24
17
14
65
32
58
33
22
Full Power
MHz/Pop
Medium
$1.88
15
$8.28
46
$17.99
110
$17.94
140
$2.75
26
$2.00
12
$5.43
39
$10.70
37
$1.95
12
$2.46
14
$3.63
19
$7.16
35
$4.48
20
$7.46
48
$3.58
16
$4.06
22
$1.20
2
$15.49
45
$1.34
5
$2.07
10
$5.93
20
$2.11
8
$1.15
3
$1.47
8
$1.86
8
$16.96
55
$15.15
17
$5.99
30
$4.59
22
$6.83
22
$3.13
9
$2.86
13
$7.50
35
$6.61
19
$6.28
24
$4.35
21
$11.86
33
$11.82
47
$4.95
22
$4.33
13
$1.53
7
$2.21
8
$4.80
18
$3.39
11
$3.04
10
$13.31
56
$7.27
21
$13.05
17
$7.60
22
$5.13
20
MHz/Pop
$1.57
$5.22
$12.37
$16.74
$2.39
$1.50
$4.81
$4.89
$1.56
$1.81
$2.55
$5.01
$2.89
$6.76
$2.49
$3.58
$0.30
$6.97
$0.67
$1.59
$3.12
$1.30
$0.49
$1.31
$1.36
$9.33
$6.28
$5.29
$3.88
$4.06
$1.66
$2.32
$6.56
$3.59
$4.43
$2.85
$6.31
$8.82
$4.36
$2.68
$1.19
$1.61
$3.60
$2.20
$2.17
$11.47
$4.77
$3.83
$5.07
$4.66
2008 Auction
MHz/Pop
$1.94
$0.75
$4.10
$0.04
$1.47
$2.37
$2.38
$1.08
$1.70
$2.41
$2.65
$2.39
$2.34
$1.39
$0.16
$0.81
$1.97
$1.21
$1.13
$1.03
$2.67
$3.71
$1.66
$1.95
$0.43
$1.21
$2.41
$1.54
$1.88
$0.46
$2.35
$1.69
$2.35
$0.38
$1.38
$0.64
$1.68
$2.21
$1.03
$0.99
$1.14
$2.58
$2.21
$1.35
$2.04
$0.59
$0.95
$0.74
$1.56
$0.92

MHz/Pop Difference
($0.06)
$7.53
$13.88
$17.90
$1.29
($0.37)
$3.05
$9.62
$0.25
$0.05
$0.98
$4.77
$2.14
$6.07
$3.42
$3.25
($0.77)
$14.28
$0.21
$1.04
$3.26
($1.60)
($0.51)
($0.48)
$1.44
$15.76
$12.74
$4.46
$2.71
$6.37
$0.78
$1.17
$5.15
$6.23
$4.90
$3.71
$10.18
$9.60
$3.92
$3.34
$0.39
($0.37)
$2.59
$2.04
$1.01
$12.72
$6.33
$12.32
$6.04
$4.21

MHz/Pop Difference
($0.37)
$4.47
$8.26
$16.70
$0.92
($0.87)
$2.43
$3.81
($0.14)
($0.60)
($0.10)
$2.62
$0.55
$5.37
$2.33
$2.77
($1.67)
$5.76
($0.46)
$0.56
$0.45
($2.41)
($1.16)
($0.64)
$0.93
$8.12
$3.87
$3.75
$2.00
$3.60
($0.69)
$0.63
$4.21
$3.21
$3.06
$2.22
$4.63
$6.60
$3.33
$1.69
$0.05
($0.97)
$1.39
$0.85
$0.14
$10.88
$3.83
$3.09
$3.51
$3.74
17

Media & Cable
DMA Rank
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
DMA
Ft. Smith-Fayetteville-Springdale-Rogers, AR
Myrtle Beach-Florence, SC
Johnstown-Altoona, PA
Evansville, IN
Lincoln-Hastings-Kearney, NE
Tallahassee, FL-Thomasville, GA
Reno, NV
Tyler-Longview, TX
Ft. Wayne, IN
Boise, ID
Sioux Falls-Mitchell, SD
Augusta, GA
Youngstown, OH
Springfield-Holyoke, MA
Lansing, MI
Fargo-Valley City, ND
Peoria-Bloomington, IL
Macon, GA
Traverse City-Cadillac, MI
Montgomery, AL
Eugene, OR
Lafayette, LA
Santa Barbara-Santa Maria-San Luis Obispo, CA
Yakima-Pasco-Richland-Kennewick, WA
Monterey-Salinas, CA
Columbus, GA
Bakersfield, CA
La Crosse-Eau Claire, WI
Corpus Christi, TX
Amarillo, TX
Wilmington, NC
Chico-Redding, CA
Columbus-Tupelo-West Point, MS
Topeka, KS
Wausau-Rhinelander, WI
Rockford, IL
Monroe, LA-El Dorado, AR
Columbia-Jefferson City, MO
Duluth, MN-Superior, WI
Medford-Klamath Falls, OR
Beaumont-Port Arthur, TX
Salisbury, MD
Lubbock, TX
Wichita Falls, TX -Lawton, OK
Minot-Bismarck-Dickinson, ND
Anchorage, AK
Sioux City, IA
Palm Springs, CA
Erie, PA
Odessa-Midland, TX
2013 Coverage (P2+)

0.75
0.70
0.68
0.68
0.65
0.66
0.66
0.68
0.67
0.67
0.61
0.64
0.61
0.62
0.60
0.56
0.59
0.59
0.56
0.59
0.55
0.57
0.62
0.63
0.65
0.52
0.70
0.51
0.53
0.50
0.43
0.47
0.46
0.42
0.42
0.45
0.43
0.42
0.38
0.39
0.42
0.38
0.41
0.38
0.35
0.40
0.38
0.41
0.37
0.39
Maximum
14
32
38
16
14
10
48
34
33
5
8
25
95
120
84
3
30
40
28
18
21
16
120
5
79
38
80
18
16
2
18
18
13
18
15
55
11
9
7
5
17
55
3
15
1
2
12
180
41
3
Full Power
MHz/Pop
Medium
$3.10
10
$7.63
25
$9.36
26
$3.93
10
$3.57
5
$2.51
9
$12.06
17
$8.39
24
$8.25
31
$1.24
4
$2.18
2
$6.55
17
$25.97
90
$32.52
120
$23.15
62
$0.90
1
$8.54
17
$11.21
19
$8.32
6
$5.12
13
$6.41
6
$4.64
14
$32.35
30
$1.32
3
$20.15
72
$12.07
18
$19.12
31
$5.93
13
$5.01
11
$0.67
1
$6.95
17
$6.38
16
$4.69
11
$7.09
8
$6.00
6
$20.46
45
$4.30
8
$3.60
7
$3.06
3
$2.14
1
$6.80
14
$24.29
50
$1.23
2
$6.58
12
$0.48
0
$0.83
1
$5.32
5
$73.09
100
$18.43
29
$1.29
1
MHz/Pop
$2.22
$5.96
$6.40
$2.46
$1.28
$2.26
$4.27
$5.93
$7.75
$0.99
$0.55
$4.45
$24.61
$32.52
$17.09
$0.30
$4.84
$5.32
$1.78
$3.70
$1.83
$4.06
$8.09
$0.79
$18.37
$5.72
$7.41
$4.28
$3.44
$0.33
$6.56
$5.67
$3.97
$3.15
$2.40
$16.74
$3.12
$2.80
$1.31
$0.43
$5.60
$22.08
$0.82
$5.26
$0.00
$0.42
$2.22
$40.61
$13.03
$0.43
2008 Auction
MHz/Pop
$1.89
$1.56
$0.04
$0.17
$0.44
$2.52
$0.66
$0.85
$0.67
$1.00
$1.24
$1.60
$0.94
$1.62
$2.13
$0.14
$0.67
$1.85
$1.04
$0.98
$0.51
$1.03
$2.56
$0.42
$1.03
$0.27
$1.04
$2.31
$0.28
$0.29
$0.47
$0.11
$0.50
$0.58
$1.94
$0.63
$0.98
$0.75
$0.55
$0.27
$0.57
$0.50
$0.25
$0.28
$0.31
$0.44
$1.82
$0.34
$0.05
$0.52
18

MHz/Pop Difference
$1.21
$6.07
$9.32
$3.76
$3.13
($0.01)
$11.40
$7.55
$7.59
$0.24
$0.94
$4.95
$25.03
$30.90
$21.02
$0.76
$7.87
$9.35
$7.28
$4.14
$5.90
$3.61
$29.79
$0.90
$19.12
$11.80
$18.08
$3.62
$4.73
$0.37
$6.48
$6.27
$4.19
$6.51
$4.06
$19.83
$3.32
$2.85
$2.51
$1.87
$6.24
$23.79
$0.98
$6.30
$0.17
$0.39
$3.50
$72.75
$18.38
$0.77

MHz/Pop Difference
$0.33
$4.40
$6.36
$2.29
$0.83
($0.26)
$3.61
$5.08
$7.09
($0.01)
($0.69)
$2.86
$23.66
$30.90
$14.95
$0.16
$4.17
$3.47
$0.74
$2.72
$1.32
$3.03
$5.53
$0.37
$17.34
$5.44
$6.37
$1.97
$3.16
$0.04
$6.09
$5.56
$3.47
$2.57
$0.46
$16.11
$2.15
$2.05
$0.76
$0.16
$5.04
$21.58
$0.57
$4.98
($0.31)
($0.02)
$0.40
$40.27
$12.98
($0.09)

DMA Rank
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
165
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
DMA
Albany, GA
Joplin, MO-Pittsburg, KS
Rochester, MN-Mason City, IA-Austin, MN
Panama City, FL
Terre Haute, IN
Bangor, ME
Wheeling, WV- Steubenville, OH
Bluefield-Beckley-Oak Hill, WV
Binghamton, NY
Biloxi-Gulfport, MS
Sherman, TX - Ada, OK
Idaho Falls-Pocatello, ID
Gainesville, FL
Missoula, MT
Abilene-Sweetwater, TX
Yuma, AZ-El Centro, CA
Hattiesburg-Laurel, MS
Billings, MT
Clarksburg-Weston, WV
Quincy, IL-Hannibal, MO-Keokuk, IA
Utica, NY
Dothan, AL
Rapid City, SD
Elmira, NY
Lake Charles, LA
Watertown, NY
Jackson, TN
Harrisonburg, VA
Alexandria, LA
Marquette, MI
Jonesboro, AR
Bowling Green, KY
Charlottesville, VA
Laredo, TX
Grand Junction-Montrose, CO
Meridian, MS
Lima, OH
Butte-Bozeman, MT
Lafayette, IN
Greenwood-Greenville, MS
Great Falls, MT
Twin Falls, ID
Bend, OR
Parkersburg, WV
Eureka, CA
Cheyenne, WY-Scottsbluff, NE
Casper-Riverton, WY
San Angelo, TX
Mankato, MN
St. Joseph, MO
2013 Coverage (P2+)

0.38
0.37
0.34
0.31
0.34
0.32
0.30
0.31
0.31
0.32
0.31
0.34
0.29
0.26
0.28
0.34
0.27
0.25
0.25
0.24
0.24
0.26
0.23
0.23
0.24
0.23
0.22
0.22
0.22
0.19
0.19
0.19
0.18
0.26
0.17
0.17
0.13
0.15
0.16
0.17
0.15
0.17
0.15
0.14
0.14
0.13
0.13
0.13
0.12
0.11
Maximum
14
12
15
15
22
6
59
16
40
16
61
2
31
2
10
11
15
1
31
8
52
12
2
8
25
17
13
64
10
4
12
26
39
9
2
13
36
1
52
7
1
2
2
16
1
35
0
2
14
15
Full Power
MHz/Pop
Medium
$6.13
10
$5.37
9
$7.37
9
$8.19
7
$10.90
17
$3.17
5
$33.20
53
$8.67
15
$21.35
16
$8.23
14
$32.89
40
$0.97
1
$18.00
28
$1.28
1
$6.06
5
$5.33
8
$9.12
13
$0.66
1
$20.95
15
$5.54
7
$35.65
14
$7.76
9
$1.44
1
$5.89
7
$17.66
15
$12.48
16
$9.66
13
$48.63
31
$7.57
7
$3.53
2
$10.29
12
$22.77
11
$36.29
27
$5.85
5
$1.95
1
$12.96
10
$47.35
29
$1.10
1
$54.39
52
$6.95
7
$1.09
0
$1.96
1
$2.21
1
$18.46
16
$1.21
1
$44.21
8
$0.00
0
$2.48
1
$18.87
14
$22.21
14
MHz/Pop
$4.38
$4.03
$4.42
$3.82
$8.43
$2.64
$29.83
$8.12
$8.54
$7.20
$21.57
$0.49
$16.26
$0.64
$3.03
$3.88
$7.90
$0.66
$10.14
$4.85
$9.60
$5.82
$0.72
$5.15
$10.60
$11.75
$9.66
$23.55
$5.30
$1.76
$10.29
$9.63
$25.12
$3.25
$0.98
$9.97
$38.14
$1.10
$54.39
$6.95
$0.00
$0.98
$1.10
$18.46
$1.21
$10.11
$0.00
$1.24
$18.87
$20.73
2008 Auction
MHz/Pop
$0.38
$1.23
$0.76
$0.70
$0.32
$0.29
$0.06
$0.38
$0.04
$1.52
$0.12
$1.00
$2.76
$0.50
$0.33
$0.18
$0.04
$1.01
$0.50
$0.04
$0.14
$1.29
$1.07
$0.13
$1.76
$0.04
$0.04
$0.04
$2.58
$0.04
$0.15
$0.04
$0.18
$0.21
$0.04
$0.04
$0.19
$0.10
$0.38
$0.10
$0.67
$0.20
$0.20
$0.15
$0.05
$0.33
$0.61
$1.24
$0.05
$1.20

MHz/Pop Difference
$5.75
$4.15
$6.61
$7.49
$10.58
$2.88
$33.14
$8.29
$21.31
$6.71
$32.77
($0.03)
$15.25
$0.78
$5.72
$5.15
$9.08
($0.35)
$20.45
$5.50
$35.51
$6.47
$0.37
$5.76
$15.90
$12.44
$9.62
$48.59
$4.99
$3.49
$10.14
$22.73
$36.11
$5.64
$1.91
$12.92
$47.16
$1.00
$54.01
$6.85
$0.42
$1.76
$2.01
$18.31
$1.16
$43.88
($0.61)
$1.24
$18.82
$21.02

MHz/Pop Difference
$3.99
$2.80
$3.66
$3.12
$8.10
$2.35
$29.76
$7.74
$8.50
$5.68
$21.45
($0.51)
$13.50
$0.14
$2.69
$3.70
$7.86
($0.35)
$9.64
$4.81
$9.46
$4.53
($0.35)
$5.02
$8.84
$11.71
$9.62
$23.51
$2.72
$1.72
$10.14
$9.59
$24.94
$3.04
$0.94
$9.93
$37.95
$1.00
$54.01
$6.85
($0.67)
$0.78
$0.90
$18.31
$1.16
$9.78
($0.61)
($0.00)
$18.82
$19.53
19

Media & Cable
DMA Rank
201
202
203
204
205
206
207
208
209
210
DMA
Ottumwa, IA-Kirksville, MO
Fairbanks, AK
Victoria, TX
Zanesville, OH
Helena, MT
Presque Isle, ME
Juneau, AK
North Platte, NE
Alpena, MI
Glendive, MT
2013 Coverage (P2+)

0.11
0.09
0.08
0.08
0.06
0.07
0.06
0.03
0.04
0.01
Maximum
7
0
20
32
2
1
0
2
8
0
Full Power
MHz/Pop
Medium
$10.61
5
$0.00
0
$41.11
19
$66.94
32
$5.21
1
$2.55
1
$0.00
0
$9.63
1
$35.90
6
$0.00
0
MHz/Pop
$7.58
$0.00
$39.05
$66.94
$2.61
$2.55
$0.00
$4.82
$26.92
$0.00
2008 Auction
MHz/Pop
$0.04
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
20

MHz/Pop Difference
$10.57
$0.00
$41.11
$66.94
$5.21
$2.55
$0.00
$9.63
$35.90
$0.00

MHz/Pop Difference
$7.54
$0.00
$39.05
$66.94
$2.61
$2.55
$0.00
$4.82
$26.92
$0.00

Required Disclosures
Additional Information Available Upon Request
I certify that:
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issuers discussed; and
2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed
by me in this research report.
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STOCK RATING
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next 12 months. BUY
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over the next 12 months. HOLD
3=Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12
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As of: October 2, 2014
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21
Media & Cable

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Wells Fargo Wireless Auction October 14

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October 2, 2014

Media & Cable

A quick review of the incentive auction: The broadcast incentive auction

Please see page 21 for rating definitions, important disclosures

Marci Ryvicker, CFA, CPA, Senior Analyst

Media & Cable

WELLS FARGO SECURITIES, LLC

We took a detailed look at spectrum value using updated information as provided

A quick review of the broadcast incentive auction:

FINALLY--we got the reserve prices!

WELLS FARGO SECURITIES, LLC

Broadcast: A Detailed Look At the Incentive Auction

WELLS FARGO SECURITIES, LLC

Media & Cable

Source: FCC and Wells Fargo Securities, LLC

$0.68 Verizon / SpectrumCo

Source: FCC and Wells Fargo Securities, LLC

Broadcast: A Detailed Look At the Incentive Auction

WELLS FARGO SECURITIES, LLC

WELLS FARGO SECURITIES, LLC

Media & Cable

Stations Accepting Bid Price

Stations in Excess of Clearing Target

Dropped out participants

Market clears / dropped out participants

i. The Reverse Auction begins with a Clearing Target of 2

(2) i. The second round begins with a price of $$$$$

ii. 5 stations accept this Opening Price

iii. Since there is 1 station above the Clearing Target, the

iii. Since there are 3 stations above the Clearing Target,

i. The third round begins with a price of $$$$

i. The fourth round begins with a price of $$$

ii. 2 stations accept this price

iii. Since there is 1 station above the Clearing Target, the

iii. Since there are no stations above the Clearing Target,

Source: FCC and Wells Fargo Securities, LLC

WELLS FARGO SECURITIES, LLC

Broadcast: A Detailed Look At the Incentive Auction

Illustrative Forward Auction Example With 6 Blocks For Sale

0 Blocks --- Prices set

i. The Forward Auction begins with 6 blocks for sale

(2) i. The round begins with a Bid Price of $$$

ii. Bidder 1 and Bidder 2 each demand 6 blocks

ii. Bidder 1 and Bidder 2 each reduce their demand by 2

iii. Since there are 6 blocks of excess demand, a new

iii. Since there are 2 blocks of excess demand, a new

i. The round begins with a Bid Price of $$$$

i. The round begins with a Bid Price of $$$$$

ii. Bidder 1 reduces its demand by 1 block

ii. Bidder 1 reduces its demand by 1 additional block

iii. Since there is 1 block of excess demand, a new

iii. Since there is no excess demand for blocks, the

Source: FCC and Wells Fargo Securities, LLC

Media & Cable

WELLS FARGO SECURITIES, LLC

WE USED THE FCCS RESERVE PRICES TO CALCULATE SPECTRUM PORTFOLIO

WELLS FARGO SECURITIES, LLC

Broadcast: A Detailed Look At the Incentive Auction

Med. Spec. Val.

Max. Spec. Val.

Med. Spec. Val.

Max. Spec. Val.

Med. Spec. Val.

Max. Spec. Val.