Tribune to Acquire 19 TV Stations in $2.73 Billion Deal3 Jul, 2013 By: Doug McPherson
CHICAGO – Tribune Co. announced Monday it has agreed to buy 19 local TV stations from Local TV Holdings for $2.7 billion in cash – a deal that makes it one of the largest TV station owners in the country.
If the deal goes through, Tribune will have 42 stations in 16 markets, including New York, Los Angeles, Miami and Seattle. Tribune contends that “most of Local TV’s stations are ranked No. 1 or No. 2 in revenue share” in their markets, and the transaction will bring “significant free cash flow.”
Tribune’s new broadcast portfolio will include 14 CW affiliates, 14 Fox affiliates, five CBS affiliates, three ABC affiliates, two NBC affiliates and four independents. It will own 14 stations in the country’s top 20 markets and become the largest Fox affiliate group, the company said. Local TV is principally owned by private equity firm Oak Hill Capital Partners.
Tribune plans to distribute more video and digital content through its TV and digital properties, and the acquisition gives it more options to offer advertisers, USA Today reports. “Since joining Tribune in early 2013, we have been setting the strategic foundation to transform Tribune and help chart the path forward – building our multimedia capabilities and asset portfolio to become the country’s leading independent content creator and distributor,” Peter Liguori, Tribune CEO, told the newspaper. “This is a transformational acquisition for Tribune.”
The deal comes three weeks after Gannett signed a similar deal to nearly double its TV station business agreeing to buy Belo’s TV stations for $2.2 billion, increasing its broadcast portfolio from 23 to 43 stations. The deal, financed by debt, is expected to close by the end of 2013.
Reportedly, more deals for consolidation also could be brewing in the cable TV industry, as investors are drawn to the possibility of combining pay-TV service with Internet subscriptions to keep viewers under one tent.
Cable TV pioneer and chairman of Liberty Media, John C. Malone remains interested in a deal for Time Warner Cable, according to a report in the New York Times Monday. Citing unnamed sources, the report said Malone would have Charter Communications acquire TWC. Liberty owns 27 percent of Charter (Response This Week, June 19).
If Malone pulls off the deal, the Times report says he would use the combined company to drive further consolidation in the cable industry.