EXCLUSIVE: Disney to Sell Two Stations
WJRT in Flint, Mich., and WTVG in Toledo, Ohio, to continue as ABC affiliates
By Melissa Grego -- Broadcasting & Cable, 11/3/2010 3:36:25 PM
Updated 5:10 p.m. ET
The Walt Disney Company has made an agreement to sell the two smallest O&Os in its 10-station ABC Owned Television Stations Group to the stations' former owner SJL Broadcasting.
The stations -- WJRT in Flint, Mich., and WTVG in Toledo, Ohio, - are strong revenue generators in their markets and are expected to remain ABC affiliates. Pending FCC approval, the deal is expected to be completed in early 2011.
There has been speculation that Disney might spin off ABC, and Disney CEO Bob Iger, who is scheduled to report the company's earnings next week on Nov. 11, kept his options open back in March during the company's annual shareholders meeting when he said, "There are no guarantees in terms of what will remain part of our company and what will not." A Disney spokeswoman said the company has "no plans" to sell any more of its O&Os, and there are "no current plans" to acquire additional stations.
Rebecca Campbell, the former WABC New York chief who in May was named president of the ABC Owned Television Stations Group, released a statement to B&C saying the move is part of the group's strategy to focus on its larger-market outlets. Its next-smallest outlet after the Flint and Toledo stations, KFSN in Fresno, Calif., serves a specific strategic purpose for the group, acting as the technology hub, where research and testing of new technology is conducted that then can be rolled out to the rest of the stations.
"The proposed sale of these Flint and Toledo properties makes strategic sense for the future direction of the ABC Owned Television Stations Group," Campbell said in her statement. "As we sharpen our focus on larger markets with greater growth potential, we're gratified that these well-run, local stations will be in the able hands of SJL, which is geared toward smaller stations and has a strong history with these two in particular."
Prior to ABC's acquisition of both stations in 1995, they were owned and managed by SJL Broadcast Management. George Lilly, head of SJL Broadcasting, released a statement to B&C calling the acquisition "tremendously important to SJL Broadcasting's current strategy."
"We are pleased to once again be associated with both stations who have remained market leaders under ABC's diligent, community-driven management," Lilly said in his statement. "We look forward to a continued relationship with the ABC Television Network."
While WTVG and WJRT are strong news stations, industry watchers say Lilly's SJL Broadcasting likely got a fair deal on the stations, due to the economic struggles of those Midwestern markets, and Flint in particular. The watchers say Lilly may be keen to build up a station group once again.
Formerly CEO of Montecito Broadcast Group, as SJL Broadcast Management had been known, Lilly used the private-equity giant Blackstone Group to acquire four Emmis stations in 2006 for $259 million, or 14 times cash flow.
In 2007, New Vision acquired the Montecito-owned stations, which included KOIN Portland and KHON Honolulu, also at around a 14 multiple of cash flow.
The two ABC O&Os won't fetch anything close to that, insiders believe.
The station sales market has been very quiet for years. The 2010 sales include LIN acquiring WIWB Green Bay and WBDT Dayton from ACME for $11.5 million; Local TV acquiring WGNT Norfolk from CBS for $16.5 million; and London Broadcasting picking up the McKinnon family's KIII Corpus Christi for $31.3 million. All of the above are CWs, except for ABC affiliate KIII.
Flint is in DMA No. 69. WJRT took in $14 million in revenue in 2009, according to BIA/Kelsey, tops in the market. Toledo this year moved up three slots to DMA No. 70. WTVG booked $12.8 million last year, per BIA/Kelsey, trailing Raycom's WTOL.
ABC uses its O&O group, which includes WABC New York and KABC Los Angeles, to help determine spot demand and pricing in its recently-unveiled Inventory Exchange System (IES), which has the network offering eight of its spots to affiliates in mid and late November. (Related: ABC Ad Offer Spot-On, B&C, Nov. 1, 2010).
With WJRT and WTVG out of the picture, the ABC Owned TV Stations Group will comprise eight stations: WABC; KABC Los Angeles; WLS in Chicago; WPVI in Philadelphia; KGO in San Francisco; KTRK in Houston, Tex.; WTVD in Raleigh-Durham, N.C.; and KFSN in Fresno, Calif.
Michael Malone contributed to this report.
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Now meaning WJRT will start "blocking out" ABC's programming again when they feel like it (for example: having been a teenager in the 70's, they blithely denied us of "American Bandstand" on Saturday afternoons; I never saw the show again until cable came to the Lansing, Michigan area in late 1975 - when I was 14 - and I was able to see "AB" again on WUHQ, Channel 41 in Battle Creek until 1978, when my family and I moved to Illinois, then I saw "AB" on ABC-owned WLS, Channel 7 in Chicago).
At least when Disney/ABC owned WJRT, I was assured they would adhere to ABC's schedule without any problem, like WLS and WABC in New York still do. So I suppose those days are gone again, forever.
W. Warfield - 5/1/2011 8:03:30 PM EDT -
Dallas, Boston, Atlanta, and Washington, DC are 4 possible markets ABC can set their eyes on acquiring. Detroit's not a bad market either since ABC owned WXYZ originally.
Also, Disney should just sell all of ABC & ESPN because Disney sees no use for them, and it's just dragging them both down ever since acquired in 1995.
Daniel Quintanilla - 11/5/2010 10:14:53 AM EDT -
The story I heard was that Rupert Murdoch was sniffing around the Flint/Tri's market to acquire a Fox VHF O&O, so ABC bought WJRT to head that off (WNEM and WEYI had just swapped NBC and CBS affiliations). I heard that Rupert wanted to be lower on the dial than channel 66.
Dan D. - 11/4/2010 8:39:28 PM EDT -
Well ABC bought the stations as it thought it might lose WXYZ to CBS. Since the Flint stations reaches into northern Detroit and the Toledo reaches into the southern part of Detroit (market) it made sense. Now with digital TV UHF is king and it makes no sense to keep these "small change" stations
ericpost - 11/3/2010 7:07:33 PM EDT
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