Insurer/investment manager Lincoln National Corp. is hiring advisers to help it sell its broadcast/media unit (Lincoln Financial Media) for about $1.5 billion, according to an unsourced Wall Street Journal report. The unit is comprised of 18 radio stations, three TV stations and a television-production company that creates and distributes programming for Southeastern Conference and Atlantic Coast Conference college football and basketball. The Journal says the time is ripe for such a sale: private-equity firms are looking for media assets and are willing to pay healthy cash-flow multiples, as witnessed by last week's LBO of Clear Channel Communications for about 13x cash-flow. Some college conferences have begun creating their own broadcast networks, such as the Mountain West Conference last year and the Big Ten's channel scheduled to launch before football season this year. Southeastern Conference, whose deals with Disney's ESPN and CBS expire in 2009, has publicly stated it would consider launching its own network. The Journal concedes it remains possible nothing will come of this, but, it says, "the action is the strongest sign yet that the insurer is deeply considering getting out of the business that isn't core to its operations."
Sources: Wall Street Journal, Reuters
Commentary: Jim Cramer's Take on LNC • Lincoln Financial Media on Wikipedia
Stocks/ETFs to watch: Lincoln National Corp. (LNC), Walt Disney Company (DIS), CBS Corp. (CBS), Clear Channel Communications Inc. (CCU). Competitors: American International Group, Inc. (AIG), Prudential Financial Inc. (PRU). ETFs: iShares Dow Jones US Insurance (IAK), PowerShares Dynamic Financials (PFI), PowerShares Dynamic Insurance (PIC)
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