Incentive Auction Broadcaster Payout Timing – A Guessing Game

It’s the date the FCC has refused to announce – the date that the 175 winning broadcasters in the auction will be paid what they were promised. The day that their “provisional” status becomes reality. Without saying a date, the FCC has suggested that it may be able to pay all the winning broadcasters in one fell swoop. And from that, it is pretty easy to deduce that the “all at once” possibility would be sooner than the alternative, “pay-by-transition-phase” approach.

Reading the tea leaves is somewhat informative. Like a national writer we saw who looked at history and projected 90 days after auction closing for payments. Or large broadcast companies informing shareholders of expected auction proceeds in the third quarter of 2017.

So here’s the deal. The FCC’s own actions contain the strongest indicators of payment timing. The deadline for forward auction bidders to pay up for their new licenses was May 11th. Those are the funds that the FCC will tell the US Treasury to release to broadcast station winners, but not until the FCC has granted the forward auction licenses, applications for which have been on file since April 11. Now the drumroll… Most of those applications were accepted for filing (a purely administrative action) on May 18^th. Petitions to deny or oppositions can be filed through June 6^th, with replies by June 13^th. Assuming, without knowing, that many of those applications can be granted in the last half of June, one can deduce that a grant of licenses equivalent to $10.3 billion in bids — just under half of the entire auction result — might just be possible, enabling the FCC’s plan to pay all winning broadcasters at one time.

July? August? Depending on FCC efficiencies, neither is outside the realm of possibility for auction payment timing. The FCC has already acknowledged receipt of winning station Form 1875s, and should begin emailing such stations in the next two weeks to access the banking module in CORES to populate their bank account info. And, so, we wait. And guess.