Digital Advertising & Media - Coady Diemar€¦ · I. Executive Summary 2 Coady Diemar tracks...

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Digital Advertising & Media Market Update January 2016 Independent Advice. Seamless Execution. CONFIDENTIAL This announcement is neither an offer to sell nor a solicitation to buy securities and does not constitute a recommendation to buy or sell any of the securities of the companies mentioned in this report. The information contained in this report comes from sources Coady Diemar Partners believe to be reliable, but we make no representation as to its accuracy. This announcement appears as a matter of record only. Coady Diemar Partners is a registered broker / dealer with the U.S. Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority (FINRA). Copyright (C) 2016 Coady Diemar Partners, LLC. All rights reserved.

Transcript of Digital Advertising & Media - Coady Diemar€¦ · I. Executive Summary 2 Coady Diemar tracks...

Digital Advertising & Media

Market Update

January 2016

Independent Advice. Seamless Execution.

CONFIDENTIAL

This announcement is neither an offer to sell nor a solicitation to buy securities and does not constitute a recommendation to buy or sell any of the securities of the companies mentioned in this report.

The information contained in this report comes from sources Coady Diemar Partners believe to be reliable, but we make no representation as to its accuracy. This announcement appears as a matter

of record only. Coady Diemar Partners is a registered broker / dealer with the U.S. Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority (FINRA).

Copyright (C) 2016 Coady Diemar Partners, LLC. All rights reserved.

Executive Summary

1

I. Executive Summary

II. Stock Price Performance by Sub-Sector

III. Digital Growth by Sector

IV. Notable M&A

V. Appendix

A. Public Market Comparables Analysis

I. Executive Summary

2

Coady Diemar tracks operating, financial and stock market performance of 4 sub-sectors of the

Internet/Digital advertising market

– Digital media, social media, advertising technology and marketing technology

Stock price performance 2016: In the first week of 2016, the S&P 500 had its worst start to the year ever (-6.0)%

– The four sectors we track followed suit: the digital media (-6.2%), martech (-6.8%) and social media (-7.1%) indices performed in-line

with the market, while the ad tech index (-11.0%) underperformed

Stock price performance 2015: 3 of the 4 sectors outperformed the market in 2015

– The slowest revenue grower, digital media, had the best performing stocks, while the 2nd fastest growing sector, ad tech, was the worst

performing group

– CDP’s digital media index (+36%), social media index (+24%) and marketing technology index (+23%) all significantly outperformed

the market (the S&P 500 decreased 0.7% in 2015)

– CDP’s ad tech index (-28%) significantly underperformed the market, with only Rubicon Project (+2%) up in 2015

Internet ad revenue $56.5 billion TTM Sept 2015

– 2nd largest advertising medium after TV

– Up from $49.5 billion in 2014

– 3Q 2015 internet ad revenue increased 23% to $15 billion, reflecting a continuation of 1Q 2015 (+22%) and 2Q 2015 (+22%) trends

The social media sector (+40%) reported the strongest revenue growth in 3Q 2015 (the most recent quarter)

– Followed by the ad tech sector (+31%), the marketing tech sector (+26%) and the digital media sector (+6%)

– Revenue growth in the social media sector was led by Twitter (+58%) and Facebook (+41%)

I. Executive Summary

3

Notable M&A

– Coady Diemar recently completed its year-end analysis of M&A in the digital media, information and technology sectors. The study

showed that aggregate deal value in these sectors increased by 2.7% to $237.5B from $231.1B in 2014.

– In terms of deal activity measured by number of announced M&A transactions in digital media, information & technology, 2,285

acquisitions were announced in 2015 compared to 2,218 in 2014, an increase of 3.0%.

– There were several notable M&A transactions in 2015 including the $4.3B acquisition of AOL by Verizon Communications; the $3.1B

acquisition of HERE by Daimlar Benz; IBM’s acquisition of the The Weather Company’s digital assets for a rumored $2B; and Permira

Advisers and Sterling Partners acquisition of eBay Enterprises for $925M.

– The average and median revenue multiple of these transactions was 3.7x and 2.7x, respectively.

Social media stocks enjoy premium multiples

– Social media stocks currently trade at 5.9x 2016E revenues, followed by marketing tech (3.8x), digital media (2.4x) and ad tech (0.8x)

– Ad tech stocks currently trade at a discount to several traditional media sectors on 2016E revenues, including outdoor advertising (3.9x),

broadcast TV (2.7x), and broadcast radio (2.1x)

– At 0.8x 2016E revenues, ad tech stocks currently trade virtually in-line with newspapers (0.7x)

4

II. Stock Price Performance

CDP’s social media index outperformed the S&P

500 in 2015

– Social media index increased 24.5% in 2015, significantly

outperforming the S&P 500 (-0.7%)

Facebook drove the performance of social media

index

– Leaders: MeetMe (+134%); Facebook (+34%)

– Laggards: Twitter (-35%); LinkedIn (-2%)

In the first week of 2016 – CDP’s social media index

(-7.1%) slightly underperformed the S&P (-6.0%)

Digital Media

Digital media stocks (+36%) outperformed the S&P

500 (-0.7%) in 2015

GOOGL drove the digital media index’s result

– Leaders: GOOGL (+47%), WebMD (+22%)

– Laggards: Everyday Health (-36%), Yahoo (-35%)

In the first week of 2016, digital media (-6.2%)

performed in-line with the S&P (-6.0%)

Social Media

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II. Stock Price Performance – Ad Tech and MarTech

CDP’s Martech index (+23.1%) significantly

outperformed the S&P 500 in 2015

Large caps outperformed small caps

– Leaders: Hubspot (+68%); Salesforce (+32%) and

Adobe (+29%) significantly outperformed

– Laggards: Marin (-58%), TubeMogul (-40%);

Brightcove (-20%) and Akamai (-16%) significantly

underperformed

In the first week of 2016, the Martech index (-6.8%)

underperformed the S&P 500 (-6.0%)

Ad Tech

CDP’s ad tech index (-26.1%) significantly

underperformed the S&P 500 (-0.7%) in 2015

A “high beta” sector - outperformed through July, but

significantly underperformed in 2H 2015

– Leaders: Rubicon Project (+2%)

– Laggards: Maxpoint (-85%); RocketFuel (-78%); Matomy

Media (-55%) significantly underperformed

In the first week of 2016, the ad tech index (-11.0%)

significantly underperformed the S&P (-6.0%)

Marketing Tech

III. Digital Growth – Digital and Social Media

6

3Q revenues among digital media companies increased by 6.4% on

average, lead by Pandora (+30%), Everyday Health (+28%) and

Google/Alphabet (+13%)

3Q EBITDA among digital media companies decreased by 9.1% on

average.

EBITDA increases were led by WebMD (+21%) and Google/Alphabet

(+13%), while companies with EBITDA decreases included United

Online (-44%), Yahoo! (-33%) and Pandora (-16%)

Digital Media

Social Media

3Q revenues among social media companies increased by 39.6% on

average, lead by Twitter (+58%), and Facebook (+41%)

3Q EBITDA among social media companies increased by 17.4% on

average, lead by LinkedIn (+19%) and Facebook (+16%)

Neither Twitter nor MeetMe generate positive EBITDA, though

Twitter narrowed its EBITDA loss to $24M from $101M in 3Q 2014

Digital Media - 3Q 2015 Growth Rates

Revenue EBITDA

Pandora Media 30.0% (15.7)%

Everyday Health 28.3% (2.1)%

Alphabet 13.0% 13.0%

IAC/InterActiveCorp 7.2% (2.7)%

Yahoo! 6.8% (32.6)%

WebMD 6.4% 20.6%

United Online (9.3)% (44.3)%

Demand Media (31.0)% NMF

Average - Digital Media 6.4% (9.1)%

Social Media - 3Q 2015 Growth Rates

Revenue EBITDA

Twitter 57.6% NMF

Facebook 40.5% 16.1%

LinkedIn 37.2% 18.8%

MeetMe 23.3% NMF

Average - Social 39.6% 17.4%

III. Digital Growth – Ad & Marketing Tech

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3Q revenues among ad tech companies increased by 31.3% on average,

led by TubeMogul (+70%) and Criteo (+36%).

Rubicon Project’s 100% revenue growth rate reflects organic growth

plus the acquisitions of Chango, iSocket and Shiny

Only Criteo and Rubicon Project generated positive EBITDA in 3Q

2015. Criteo’s 3Q EBITDA grew (+55%), while Rubicon Project

generated positive EBITDA of $1M, up from a loss of $3M in 3Q 2014.

As a group, these ad tech companies posted an EBITDA loss of $1M, a

substantial improvement from the $12M EBITDA loss in 3Q 2014

Ad Tech

Marketing Tech

3Q revenues among marketing tech companies increased by 26.3% on

average, lead by TubeMogul (+70%), HubSpot (+57%) and Marketo

(+40%)

3Q EBITDA among marketing tech companies increased by 88% on

average, lead by salesforce.com (+146%) and Adobe (+115%)

This group posted aggregate EBITDA of $612M, up 76% from an

aggregate $348M in 3Q 2014. salesforce accounted for 54% of this

group’s 3Q EBITDA

Ad Tech - 3Q 2015 Growth Rates

Revenue EBITDA

Rubicon Project 99.8% NMF

TubeMogul 69.5% NMF

Criteo 36.1% 55.4%

MaxPoint Interactive 32.5% NMF

Tremor Video 26.2% NMF

Rocket Fuel 9.5% NMF

YuMe (9.6)% NMF

Blinkx (13.8)% NMF

Matomy Media (a) NA NA

Average - Ad Tech 31.3% NMF

(a) Matomy only reports half and full year results

MarTech - 3Q 2015 Growth Rates

Revenue EBITDA

TubeMogul 69.5% NMF

HubSpot 56.7% NMF

Marketo 39.8% NMF

salesforce.com 23.7% 146.4%

Adobe Systems 21.1% 115.4%

Akamai Technologies 10.6% 1.1%

Brightcove 7.3% NMF

Bazaarvoice 5.5% NMF

Marin Software 2.5% NMF

Average - MarTech 26.3% 87.6%

IV. Notable M&A Transactions

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Notes:

NM: Not Meaningful;

Sources: Capital IQ, company research

Announced Enterprise Enterprise Value /

Date Buyer Target Category Value Rev. EBITDA

12/17/2015 Vivendi SA Radionomy SA Digital content; music NA NA NA

12/4/2015 International Business Machines Clearleap, Inc. Ad tech; video NA NA NA

12/1/2015 Perion Network Ltd. Undertone Networks, Inc. Ad network $180.0 NA NA

11/16/2015 IDI, Inc. Fluent, Inc. Lead gen $250.0 2.0x 12.6x

11/16/2015 Matomy Media Group Ltd. Optimatic Media, Inc. Ad tech; video $25.0 1.6x NA

11/16/2015 Pandora Media, Inc. Rdio, Inc. Digital content $75.0 NA NA

11/12/2015 Sizmek Inc. PointRoll, Inc. Ad Tech $20.0 NA NA

11/5/2015 NeuStar, Inc. MarketShare Partners LLC Analytics $450.0 7.9x NA

10/28/2015 International Business Machines The Weather Company, Product and Information; Digital content $2,000.0 NA NA

10/27/2015 Raycom Media, Inc. Pure Auto LLC Ad Network $125.0 NA NA

10/23/2015 Adiant Solve Media, Inc. Ad Tech NA NA NA

10/15/2015 Ansira, Inc. Square One Advertising, Inc. Performance $55.0 NA NA

10/7/2015 Pandora Media, Inc. Ticketfly, Inc. Ecommerce $479.9 8.7x NA

10/6/2015 Lakana, Inc. Kixer, Inc. Ad Tech NA NA NA

9/29/2015 comScore, Inc. Rentrak Corporation Measurement $771.2 7.1x NM

9/29/2015 Axel Springer Venture GmbH Business Insider, Inc. Digital content $389.8 NA NA

9/3/2015 Amazon Web Services, Inc. Elemental Technologies, Inc. Software; video $500.0 NA NA

8/31/2015 DTS Inc. iBiquity Digital Corporation Audio; Technology $172.0 3.8x NA

8/24/2015 Cross MediaWorks, LLC BlackArrow, Inc. Ad tech; Video NA NA NA

8/11/2015 Intelius Holdings, Inc. Classmates, Inc. Digital Content $30.0 0.6x NA

8/3/2015 Daimler AG; Bayerische Motoren HERE Holding Corporation Mobile; Maps $3,069.3 2.9x NA

7/28/2015 Frankly Inc. Gannaway Web Holdings, LLC Media Services $45.0 1.7x 6.9x

– There were several notable M&A transactions in 2015 including the $4.3B acquisition of AOL by Verizon Communications; the $3.1B

acquisition of HERE by Daimlar Benz; IBM’s acquisition of the The Weather Company’s digital assets for a rumored $2B; and Permira

Advisers and Sterling Partners acquisition of eBay Enterprises for $925M.

– As shown on the following page, the average and median revenue multiple of these transactions was 3.7x and 2.7x, respectively.

IV. Notable M&A Transactions (continued)

9

Notes:

NM: Not Meaningful;

Sources: Capital IQ, company research

Announced Enterprise Enterprise Value /

Date Buyer Target Category Value Rev. EBITDA

7/23/2015 Centro, Inc. GraphScience, Inc. Social Media NA NA NA

7/22/2015 The E. W. Scripps Company Midroll Media, LLC Audio; Podcast $60.0 NA NA

7/16/2015 Permira Advisers Ltd.; Sterling eBay Enterprise, Inc. Ecommerce $925.0 0.7x NA

7/13/2015 Match.com Canada Ltd. Plentyoffish Media Inc. Social Media $575.0 NA NA

6/30/2015 Vivendi SA Dailymotion SA Digital Content $302.1 4.2x NA

6/18/2015 Undertone Networks, Inc. Spark Flow S.A. Ad operations $20.0 NA NA

5/20/2015 Magnetic Media Online, Inc. MyBuys, Inc. Ecommerce NA NA NA

5/14/2015 Sizmek Inc. StrikeAd Inc. Ad tech; Mobile $11.7 1.0x NA

5/12/2015 Verizon Communications Inc. AOL Inc. Ad tech $4,282.5 1.7x 9.9x

4/29/2015 Adobe Systems Incorporated Tumri, Inc. Ad Tech; Targeting NA NA NA

4/28/2015 Twitter, Inc. TellApart, Inc. Social Media $652.9 NA NA

4/22/2015 NetSuite Inc. Bronto Software, Inc. Email $200.0 NA NA

3/31/2015 The Rubicon Project, Inc. Chango Inc. Targeting $116.0 2.7x NA

3/18/2015 AppNexus Inc. Yieldex, Inc. Publisher tools $100.0 NA NA

3/16/2015 Vector Capital Triton Digital, Inc. Ad tech; audio NA NA NA

3/4/2015 Nielsen N.V. (nka:Nielsen eXelate, Inc. DMP $200.0 8.4x NA

2/17/2015 Criteo SA DataPop, Inc. Search; eCommerce $22.0 NA NA

2/5/2015 Marin Software Incorporated Social Moov SAS Marketing $18.8 NA NA

2/2/2015 Nexstar Broadcasting Group, Inc. Yashi, Inc. Ad Tech; Video $33.0 NA NA

1/30/2015 DMG Media Investments Limited Elite Daily, Inc. Digital Content $47.0 NA NA

1/14/2015 Synacor, Inc. NimbleTV, Inc. Ad Tech; video NA NA NA

1/8/2015 Facebook, Inc. Quickfire Networks Corporation Ad Tech; Video NA NA NA

1/5/2015 Dun & Bradstreet Corp. NetProspex, Inc. (nka:Dun & Bradstreet DMP $125.0 NA NA

Mean $480.2 3.7x 9.8x

Median $148.5 2.7x 9.9x

V. Appendix

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V. Digital Media

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Notes:

NM: Not Meaningful;

Sources: Capital IQ, company research

Market Data as of 1/11/16

% of Ent. Value / 3 Year

Share 52 Week Market Net Ent. LTM Revenues EBITDA Revenue EBITDA Gross

Price High Cap Debt Value Revenues EBITDA LTM 2015E 2016E LTM 2015E 2016E CAGR Margin Margin

Alphabet Inc. $733.07 91.8% $504,151 ($62,415) $435,848 $71,763 $23,304 6.1x 5.9x 5.1x 18.7x 14.7x 12.5x 20.3% 32.5% 62.5%

Yahoo! Inc. 30.17 60.0% 28,491 (4,665) 23,860 4,948 477 4.8x 5.9x 6.2x 50.0x 25.8x 27.3x (2.5%) 9.6% 64.4%

IAC/InterActiveCorp 56.65 66.9% 5,029 180 5,234 3,213 410 1.6x 1.6x 1.6x 12.8x 10.8x 9.0x 14.7% 12.8% 74.5%

Pandora Media, Inc. 10.80 47.8% 2,305 (364) 1,941 1,096 (38) 1.8x 1.7x 1.4x NM 35.5x 28.1x NM (3.4%) 47.5%

WebMD Health Corp. 50.22 93.5% 1,852 190 2,043 607 129 3.4x 3.2x 3.0x 15.9x 10.9x 9.6x 1.3% 21.2% 60.7%

Everyday Health, Inc. 4.83 32.7% 156 77 233 213 20 1.1x 1.0x 0.9x 11.7x 5.1x 4.5x 13.6% 9.3% 72.1%

United Online, Inc. 10.99 60.6% 163 (100) 63 204 25 0.3x 0.4x 0.4x 2.5x 3.0x 3.0x (11.3%) 12.2% 66.0%

Demand Media, Inc. 5.20 75.5% 104 (38) 66 134 (18) 0.5x 0.5x 0.5x NM NM NM (19.0%) (13.1%) 48.4%

Mean 2.4x 2.5x 2.4x 18.6x 15.1x 13.4x 2.4% 10.1% 62.0%

Median 1.7x 1.6x 1.5x 14.3x 10.9x 9.6x 1.3% 10.9% 63.4%

V. Social Media

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Notes:

NM: Not Meaningful;

Sources: Capital IQ, company research

Market Data as of 1/11/16

% of Ent. Value / 3 Year

Share 52 Week Market Net Ent. LTM Revenues EBITDA Revenue EBITDA Gross

Price High Cap Debt Value Revenues EBITDA LTM 2015E 2016E LTM 2015E 2016E CAGR Margin Margin

Facebook, Inc. $97.51 88.1% $275,758 ($15,708) $260,050 $15,938 $6,655 16.3x 14.9x 10.8x 39.1x 23.9x 17.6x 49.8% 41.8% 83.9%

LinkedIn Corporation 210.93 76.4% 27,650 (1,974) 25,702 2,772 230 9.3x 8.6x 6.6x 112.0x 34.3x 24.8x 62.0% 8.3% 86.0%

Twitter, Inc. 19.65 36.7% 13,420 (1,887) 11,533 1,987 (208) 5.8x 5.2x 3.7x NM 21.4x 14.2x 136.3% (10.5%) 67.4%

MeetMe, Inc. 3.96 87.2% 181 (14) 167 50 5 3.3x 3.0x 2.5x 31.8x 8.6x 7.2x 61.2% 10.5% 100.0%

Mean 8.7x 7.9x 5.9x 61.0x 22.0x 16.0x 77.3% 12.5% 84.3%

Median 7.5x 6.9x 5.1x 39.1x 22.6x 15.9x 61.6% 9.4% 85.0%

V. Ad Tech

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Notes:

NM: Not Meaningful;

Sources: Capital IQ, company research

Market Data as of 1/11/16

% of Ent. Value / 3 Year

Share 52 Week Market Net Ent. LTM Revenues EBITDA Revenue EBITDA Gross

Price High Cap Debt Value Revenues EBITDA LTM 2015E 2016E LTM 2015E 2016E CAGR Margin Margin

Criteo SA $33.30 58.1% $2,073 ($270) $1,775 $1,188 $101 1.5x 3.4x 2.6x 19.7x 13.2x 9.5x 73.1% 8.5% 35.8%

The Rubicon Project, Inc. 15.19 73.8% 674 (80) 594 196 (7) 3.0x 2.4x 1.8x NM 13.5x 10.7x 50.1% (3.6%) 77.9%

TubeMogul, Inc. 13.12 61.3% 460 (83) 377 158 (11) 2.4x 2.2x 1.7x NM NM 129.9x 93.9% (7.1%) 68.9%

Rocket Fuel Inc. 3.55 22.6% 153 0 153 476 (54) 0.3x 0.3x 0.3x NM NM 15.9x 109.2% (11.3%) 40.9%

Matomy Media Group Ltd. 0.97 39.7% 90 (27) 100 255 19 0.4x 0.5x 0.4x 5.2x 5.6x 3.8x 30.6% 7.6% 22.8%

YuMe, Inc. 3.13 49.1% 108 (48) 59 177 (11) 0.3x 0.4x 0.3x NM NM 28.5x 37.4% (6.5%) 45.8%

Sizmek Inc. 3.42 40.4% 101 (65) 36 166 9 0.2x NA NA 4.2x NA NA 30.2% 5.2% 63.1%

Tremor Video, Inc. 1.83 55.9% 95 (66) 30 178 (15) 0.2x 0.2x 0.1x NM NM 7.6x 20.9% (8.4%) 38.2%

Blinkx plc 0.17 42.0% 69 (75) 19 200 (9) 0.1x 0.1x 0.1x NM NM 6.1x 23.4% (4.3%) 40.6%

MaxPoint Interactive, Inc. 1.43 12.7% 37 (21) 16 138 (13) 0.1x 0.2x 0.2x NM NM NM 93.6% (9.6%) 50.0%

Mean 0.9x 1.1x 0.8x 9.7x 10.8x 26.5x 56.2% (3.0)% 48.4%

Median 0.3x 0.4x 0.3x 5.2x 13.2x 10.1x 43.7% (5.4)% 43.4%

V. Marketing Tech

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Notes:

NM: Not Meaningful;

Sources: Capital IQ, company research

Market Data as of 1/11/16

% of Ent. Value / 3 Year

Share 52 Week Market Net Ent. LTM Revenues EBITDA Revenue EBITDA Gross

Price High Cap Debt Value Revenues EBITDA LTM 2015E 2016E LTM 2015E 2016E CAGR Margin Margin

salesforce.com, inc. $73.18 88.3% $48,592 $706 $49,297 $6,302 $400 7.8x 7.4x 6.1x 123.3x 40.4x 29.9x 33.3% 6.3% 75.1%

Adobe Systems Incorporated 89.38 92.7% 44,583 (2,081) 42,502 4,796 1,242 8.9x NA 7.4x 34.2x NA 20.1x 2.9% 25.9% 84.5%

Akamai Technologies, Inc. 45.46 58.0% 8,089 (48) 8,041 2,155 695 3.7x 3.7x 3.3x 11.6x 9.1x 8.3x 19.2% 32.3% 67.7%

HubSpot, Inc. 53.91 89.7% 1,838 (104) 1,734 163 (54) 10.6x 9.7x 7.2x NM NM NM 59.5% (33.2%) 71.7%

Marketo, Inc. 23.93 67.2% 1,036 (110) 930 194 (57) 4.8x 4.4x 3.4x NM NM NM 66.7% (29.5%) 65.4%

Bazaarvoice, Inc. 3.87 41.2% 312 (53) 259 197 (18) 1.3x 1.3x 1.2x NM NM 38.1x 21.7% (9.1%) 62.0%

Brightcove Inc. 5.95 70.3% 194 (22) 172 131 (1) 1.3x 1.3x 1.2x NM 25.6x 19.2x 25.3% (0.8%) 65.0%

Marin Software Incorporated 3.05 39.7% 113 (30) 83 107 (27) 0.8x 0.8x 0.7x NM NM NM 40.1% (25.6%) 62.5%

Mean 4.9x 4.1x 3.8x 56.4x 25.0x 23.1x 33.6% (4.2)% 69.2%

Median 4.3x 3.7x 3.3x 34.2x 25.6x 20.1x 29.3% (4.9)% 66.6%

V. Traditional Media - Local

15 Notes:

NM: Not Meaningful;

Sources: Capital IQ, company research

Market Data as of 1/11/16

% of Ent. Value / Net 3 Year

Share 52 Week Market Net Ent. LTM Revenues EBITDA Debt / Revenue EBITDA

Price High Cap Debt Value Revenues EBITDA LTM 2015E 2016E LTM 2015E 2016E EBITDA CAGR Margin

Broadcast TV

CBS Corporation $46.84 73.2% $22,086 $8,666 $30,752 $13,657 $3,073 2.2x 2.2x 2.1x 10.0x 9.8x 8.9x 2.8x 0.4% 22.5%

TEGNA Inc. 25.45 66.1% 5,642 4,361 10,279 6,440 1,573 1.5x 3.3x 2.8x 6.5x 9.5x 8.1x 2.8x 4.7% 24.4%

Sinclair Broadcast Group, Inc. 31.95 89.0% 3,026 3,772 6,772 2,221 744 3.0x 3.1x 2.6x 9.1x 9.5x 7.1x 5.1x 37.2% 33.5%

Tribune Media Company 33.54 47.7% 3,159 3,135 6,295 2,016 530 3.0x 3.1x 2.8x 11.9x 13.0x 9.8x 5.9x 18.0% 26.3%

Media General, Inc. 15.19 86.3% 1,943 2,212 4,185 1,156 311 3.7x 3.2x 2.6x 13.4x 11.5x 7.5x 7.1x 57.0% 26.9%

Nexstar Broadcasting Group, Inc. 55.83 90.4% 1,710 1,462 3,177 842 296 3.6x 3.6x 3.0x 10.7x 10.6x 8.0x 4.9x 27.2% 35.1%

Gray Television, Inc. 15.16 83.9% 1,117 1,155 2,272 606 231 3.6x 3.8x 2.9x 9.8x 11.8x 6.8x 5.0x 18.3% 38.1%

The E. W. Scripps Company 18.73 65.3% 1,571 322 1,893 1,032 112 1.8x 2.4x 1.9x 16.8x 16.6x 6.5x 2.9x 6.0% 10.9%

Entravision Communications Corporation7.87 82.4% 694 287 980 254 74 3.7x 3.9x 3.6x 13.2x 13.0x 11.3x 3.9x 7.6% 29.3%

Mean 2.9x 3.2x 2.7x 11.3x 11.7x 8.2x 4.5x 19.6% 27.5%

Median 3.0x 3.2x 2.8x 10.7x 11.5x 8.0x 4.9x 18.0% 26.9%

Broadcast Radio

iHeartMedia, Inc. $1.30 16.3% $116 $20,206 $20,522 $6,240 $1,793 3.3x 3.3x 3.2x 11.4x 11.4x 10.7x 11.3x 0.8% 28.7%

Cumulus Media Inc. 0.25 5.5% 58 2,404 2,463 1,189 235 2.1x 2.1x 2.1x 10.5x 9.6x 8.8x 10.2x 39.4% 19.8%

Radio One Inc. 1.64 38.9% 79 965 1,056 451 121 2.3x NA NA 8.7x NA NA 7.9x 6.6% 26.9%

Entercom Communications Corp. 10.95 82.1% 435 496 958 395 95 2.3x 2.3x 2.1x 10.1x 9.4x 8.6x 5.2x (0.3%) 24.0%

Townsquare Media, Inc. 10.38 72.3% 185 571 757 422 96 1.8x 1.8x 1.4x 7.8x 7.7x 6.7x 5.9x NM 22.9%

Salem Media Group, Inc. 5.20 65.8% 132 282 414 263 46 1.5x 1.6x 1.5x 9.0x 9.2x 7.6x 6.2x 6.9% 17.4%

Emmis Communications Corp. 0.67 30.1% 31 248 325 234 37 1.4x NA NA 8.7x NA NA 6.7x 5.6% 16.0%

Saga Communications, Inc. 43.60 90.7% 253 17 271 134 33 1.7x NA NA 8.1x NA NA 0.5x 2.3% 24.9%

Beasley Broadcast Group Inc. 3.36 60.8% 78 79 157 96 18 1.7x NA NA 8.5x NA NA 4.3x (15.6%) 19.2%

Mean 2.0x 2.2x 2.1x 9.2x 9.5x 8.5x 6.5x 5.7% 22.2%

Median 1.8x 2.1x 2.1x 8.7x 9.4x 8.6x 6.2x 3.9% 22.9%

Notes:

NM: Not Meaningful;

Sources: Capital IQ, company research

Market Data as of 1/11/16

% of Ent. Value / Net 3 Year

Share 52 Week Market Net Ent. LTM Revenues EBITDA Debt / Revenue EBITDA

Price High Cap Debt Value Revenues EBITDA LTM 2015E 2016E LTM 2015E 2016E EBITDA CAGR Margin

Outdoor Advertising

Lamar Advertising Co. 57.60 93.3% 5,564 1,939 7,503 1,334 558 5.7x 5.5x 5.3x 13.5x 12.7x 12.1x 3.5x 4.4% 41.8%

Clear Channel Outdoor Holdings Inc. $5.01 42.9% $1,799 $4,756 $6,738 $2,836 $696 2.4x 2.4x 2.3x 9.7x 9.9x 9.4x 6.8x (0.5%) 24.5%

Outfront Media Inc. 21.23 67.4% 2,921 2,195 5,116 1,510 393 3.3x 3.4x 3.3x 13.0x 11.8x 11.2x 5.6x 2.0% 26.0%

National CineMedia, Inc. 15.14 90.3% 931 900 2,026 433 208 4.7x 4.6x 4.4x 9.7x 8.9x 8.4x 4.3x (3.3%) 48.1%

Mean 4.0x 4.0x 3.9x 11.5x 10.8x 10.3x 5.1x 0.7% 35.1%

Median 4.0x 4.0x 3.9x 11.4x 10.9x 10.3x 5.0x 0.7% 33.9%

Newspaper

News Corporation $13.32 75.9% $7,380 ($1,898) $5,735 $8,539 $757 0.6x 0.7x 0.7x 7.6x 6.1x 6.2x NM (0.1%) 8.9%

The New York Times Company 13.24 91.1% 2,143 (214) 1,931 1,579 249 1.2x 1.2x 1.2x 7.7x 6.9x 7.0x NM 0.7% 15.8%

Gannett Co., Inc. 17.08 95.4% 1,965 (143) 1,822 2,965 402 0.6x NA NA 4.5x NA NA NM NM 13.6%

New Media Investment Group Inc. 18.78 72.9% 835 342 1,177 1,049 132 1.1x 1.0x 0.9x 8.9x 8.0x 6.6x 2.6x 8.2% 12.5%

The McClatchy Company 1.17 37.1% 100 946 1,047 1,081 164 1.0x 1.0x 1.0x 6.4x NA NA 5.8x (5.3%) 15.1%

Tribune Publishing Company 8.97 39.4% 235 349 584 1,668 107 0.3x 0.3x 0.3x 5.5x 4.0x 4.1x 3.3x (3.8%) 6.4%

Journal Media Group, Inc. 11.99 96.3% 293 (23) 272 412 23 0.7x 0.5x 0.5x 11.7x 5.2x 5.4x NM (3.7%) 5.7%

A. H. Belo Corporation 5.17 48.4% 111 (80) 35 272 1 0.1x 0.1x 0.1x 24.5x 3.0x 3.0x NM (11.5%) 0.5%

Mean 0.7x 0.7x 0.7x 9.6x 5.6x 5.4x 3.9x (2.2)% 9.8%

Median 0.6x 0.7x 0.7x 7.7x 5.7x 5.8x 3.3x (3.7)% 10.7%

V. Traditional Media – Local (cont’d)

This announcement is neither an offer to sell nor a solicitation to buy securities and does not constitute a recommendation to buy or sell any of the securities of the companies mentioned in this report.

The information contained in this report comes from sources Coady Diemar Partners believe to be reliable, but we make no representation as to its accuracy. This announcement appears as a matter

of record only. Coady Diemar Partners is a registered broker / dealer with the U.S. Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority (FINRA).

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