Sinclair's Chesapeake TV Acquires Barrington Stations for $370M24 stations go to new Sinclair subsidiary Chesapeake TV; Pruett Named COO of venture 2/28/2013 04:59:22 PM Eastern
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.
"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
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.