Scripps already owned 5% of the business, making its net purchase price $292 million, the company said.
Each of the four networks reaches more than 80% of the country, Scripps said.
Bounce, the African-American oriented network, in particular has been a leader in multicasting, featuring a slate of original programming—still a rarity for the medium. Grit features western and action films. Escape is focused around mystery and investigative programming. Laff is a comedy network.
Scripps COO Adam Symson, who will replace retiring CEO Rich Boehne Aug. 8, said the acquisition is “a very consistent move with the way we view the evolution of the television marketplace and media,” which has led to Scripps' expansion into digital platforms and distribution.
“We are equally enthusiastic for pay television or cable, digital and over-the-air television,” he said. “We’ve gone from a period of time when consumers watched television on distinct platforms… to consumers being ambivalent in how they get to the screen. What they want is a more unified experience.”
Additionally, Katz’s networks are viable assets in their own right, benefiting from delivering niche-targeted programming, “taking a page from the early days of cable,” Symson said. “These are fully formed businesses, and, at the same time, we believe there is a lot of growth ahead. That will come as OTA continues to develop and as audiences find programming that delights them and engages."
Brian Lawlor, Scripps’ senior VP of broadcast, said growing multicast offerings behooves Scripps at a time when OTA consumption is growing—up as much as 50% over the last five years in some markets. “There is a lot of momentum in this space,” he said.
Founder Jonathan Katz will continue to lead the Katz networks' business. The company, with about 130 employees, will remain based in the Atlanta area, Scripps said.
All four networks are Nielsen rated and depend on a blend of general-market and direct-response advertising. They are forecast to generate about $180 million in revenue and about $30 million in segment profit in 2018, Scripps said.
“In today’s fragmented television ecosystem, a growing number of viewers are consuming content from new over-the-air networks as a complement to over-the-top services,” Boehne said. “The entrepreneurs at Katz were among the first to take full advantage of this resurgence in over-the-air viewing. We were early investors in the company, and it’s a strategy and team we know well.
“Acquiring these innovators will increase our opportunity to serve the nation’s largest advertisers, who see tremendous value in the networks’ content and the large, targeted audiences they draw.”