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
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.
Sinclair ought enter a JSA/LMA/SSA with KDBC and move all of KDBC operations into KFOX studios completely away from KTSM with Deerfield Media running KDBC in El Paso, Texas and also buy KPTM with Deerfield running KXVO in Omaha, Nebraska, KPTH with Deerfield running KMEG in Sioux City, Iowa, KMPH and KFRE in Fresno, California, and Deerfield running WCWG in Greensboro, North Carolina to keep those stations alive. Chesapeake TV gets KPTM/KXVO, KPTH/KMEG, and KDBC and Sinclair gets KMPH/KFRE, and WCWG. Sinclair may see KDNL getting CW in Saint Louis, and WXLV getting FOX and WCWG keeping CW in Greensboro-High Point while ABC moves to WGHP in Greensboro-High Point, ABC moves to KTVI and FOX moves to KPLR in Saint Louis and FOX moves to KWGN and CW moves to KDVR in Denver with Tribune for KPLR and KWGN and Local TV LLC for WGHP, KTVI and KDVR in a side deal unrelated to a Sinclair owned and or operated TV station. Sinclair ought to send KABB in San Antonio, and WMYV in Greensboro-High Point over to Cunningham while sending WSMH to Deerfield Media. I would favor Nexstar/Mission grabbing WPMI/WJTC, WHP/WLYH, WSYT/WNYS, WYZZ, KRCG, KHQA, KTVO, and KBTV from Sinclair with Sinclair grabbing KLRT/KASN, and WUHF from Nexstar/Mission. I would favor Raycom/American Spirit Media grabbing WFXL. I would favor London Broadcasting grabbing KGBT, and KVII/KVHI. I would favor Gannett buying WTTA to merge with WTSP, WUCW to merge with KARE, and KDNL to merge with KSDK.
James (Jimmy) Cieloha - 2/28/2013 11:18:41 PM EST
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