Michael Melby of Gate City Capital Management presented his thesis on Entravision (US: EVC) at Best Ideas 2025, held from January 9-24.
Thesis Summary
Entravision owns and operates 49 television stations and 44 radio stations focused on the Hispanic market. Entravision also operates two digital advertising businesses including Smadex and Adwake, which operate programmatic ad purchasing platforms.
Entravision has a market capitalization of $233 million and with $94 million of net debt has an enterprise value of $327 million.
For most of its history, Entravision operated as a controlled company. In December 2022, the Company’s founder and controlling shareholder died, causing his super-voting shares to collapse into regular common stock.
In March 2024, Facebook announced that it would wind down its relationship with all of its Authorized Sales Partners, including Entravision. At the time, Facebook represented over 50% of Entravision’s revenue and 40% of its EBITDA, and the announcement caused Entravision’s shares to fall by over 60%. Following this announcement, Entravision’s new management team moved rapidly to sell non-core digital assets and cut costs.
The Company’s TV and radio stations generate average EBITDA of roughly $60 million (varying by political years). New management has also expanded the local news coverage to maximize political spending that target the Company’s valuable Hispanic demographic. The Company’s digital business generate approximately $15 million in EBITDA annually and are growing rapidly. Entravision’s television assets also control significant spectrum rights in key areas including Boston, San Diego, and Tampa.
In the last spectrum auction in 2017, Entravision generated $263 million in proceeds from the sale of spectrum in just four of their markets. New incoming leadership at the FCC has highlighted interest in running an additional spectrum auction, which could provide additional windfall profits for Entravision in the next four years.
Slides
Let’s listen to the full session and look over the transcript.
