Sinclair's Chesapeake TV Acquires Barrington Stations for $370M

24 stations go to new Sinclair subsidiary Chesapeake TV; Pruett Named COO of venture

By Michael Malone -- Broadcasting & Cable, 2/28/2013 4:59:22 PM

Sinclair Broadcast Group has agreed to purchase the 18 television stations owned by Barrington Broadcasting Group for $370 million, and entered into agreements to operate or provide sales services to another six stations. The 24 are located in 15 markets and reach 3.4% of the U.S. TV households. They include WNWO Toledo, WEYI Flint and WSTM-WTVH-WSTQ Syracuse.

The transaction is subject to regulatory approval and is expected to close in the second quarter of 2013.

Earlier in the week, Sinclair announced it was acquiring four Cox stations, and managing another, for $99 million. Sinclair also announced a side venture, Chesapeake TV, focused on smaller market stations such as the Cox pickup. Steve Pruett, former CEO of Communications Corp. of America and the current Fox affiliates board chairman, has been named chief operating officer of Chesapeake TV. Steve Marks will continue his role as COO of Sinclair Television Group, which has mid-sized market stations. 

Last month, B&C reported that Pruett and Sinclair Broadcast Group were planning a new privately held station group.

"This week, we launched our small market television group when we announced we would be acquiring certain of the Cox Media television stations," commented David Smith, president and CEO of Sinclair. "The Barrington stations are an important part of that strategy, providing meaningful scale to the group. Including synergies, we believe the Barrington stations can generate approximately $71 million of cash flow, on average. When combined with the Cox stations, we expect our expertise and resources to create approximately $29 million in synergistic, incremental cash flow, equating to approximately $232 million of added equity value or $2.85 per share."

For the past 10 years, Pruett has been with Communications Corp. of America, first as chief financial officer, then becoming president in 2006 and president/CEO and board member in 2007. "The competitive environment for local affiliate television is changing rapidly," said Pruett. "Chesapeake TV represents a tremendous opportunity to build scale and efficiency and to strengthen competitive positioning in small markets by applying Sinclair's resources, discipline and management systems, which in my observation are world class. Our vision is big, and with the backing of Sinclair, we have what it takes to execute it."

Due to FCC ownership conflict rules, Sinclair will sell WSYT Syracuse and assign its local marketing agreement and purchase option on WNYS Syracuse. The company will also sell WYZZ Peoria. In addition, the license assets of four stations will be purchased by Cunningham Broadcasting Corporation and Howard Stirk Holdings, a newly formed entity owned and controlled by Armstrong Williams, founder and CEO of communications firm The Graham Williams Group.

Sinclair has been by far the most active acquirer of stations of late. Deals for Four Points Media, Freedom Broadcasting and part of the Newport Television group, among others, saw Sinclair lay out in excess of a billion dollars on stations in the last 16 months. Prior to the Barrington announcement, Sinclair owned or serviced 87 television stations in 47 markets.