Failed Auction Wouldn't Be So Bad for Broadcasters, Ryvicker Says
A failed incentive auction would be “more of a disappointment than a thesis changer” for broadcast stocks, Wells Fargo analyst Marci Ryvicker emailed investors Wednesday. Ryvicker defined an auction failure as a conclusion of Stage 9 of the incentive auction…
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without the final stage rule ever being satisfied, meaning the money bid in the forward auction didn't ever rise to the price determined by the preceding reverse auction. Stage 4 is expected to start next week (see 1612050062). “We are still quite a ways away from this potential outcome,” said Ryvicker of any failure. One possible cause for concern is the fall in the money being offered in the forward auction, which Ryvicker suggested could indicate a major bidder may have ceased bidding. That lack of enthusiasm likely comes from the auction's proximity to the AWS-3 auction, and doesn't indicate a true drop in spectrum value, she said. “We think the political environment (and spec. the potential for media ownership relaxation) is more of a game changer than the auction ever was.” A failed auction would likely enhance the value of Dish Network's current spectrum by increasing scarcity, the analyst said; a peer also said similar (see 1612070016).