Hoffman: Cox-Fox Swap ‘Very Fair Deal’

Fox gets San Francisco, Cox gets Boston and Memphis
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The blockbuster swap between Fox Television Stations (FTS) and Cox Media Group represents a win for both parties, says Bill Hoffman (pictured), president of Cox Media Group. Fox has considerable leverage in terms of groups’ affiliation agreements, and is intent on owning stations in markets where NFC football teams reside. But Hoffman says the deal—Cox giving up market leader KTVU and independent KICU in Oakland for WFXT Boston and WHBQ Memphis—spells good opportunity for both sides.

“We ended up landing in a very fair spot,” he says.

The deal, announced June 24, was a major one, though not unexpected. Fox has had its eye on San Francisco for years. Sticking with its plans to own stations in NFC markets, it acquired WJZY Charlotte last year and put the Fox affiliation on the station. Seattle and perhaps St. Louis may be in Fox’s sights next.

Fox Television Stations did not respond to a request for comment at presstime. In a statement announcing the deal, Jack Abernethy, CEO of FTS, spoke of “a compelling growth opportunity in a top 10 market.” FTS benefits “from both the strong demographics of the Bay Area market as well as the alignment with our package of sports rights,” he added.

Marci Ryvicker, senior analyst at Wells Fargo Securities, called it a “sound and consistent” swap for publicly traded Fox. “As a part of its television deal with the NFL, FOXA has the rights to show NFC regular season, playoff, and NFC Championship games,” she wrote. “By acquiring…KTVU, the company will now have even more leverage to the NFC by getting San Francisco 49ers games.”

Cox, on the other hand, “will get more leverage to AFC games via the New England Patriots and Tennessee Titans,” she added.

Broadcasting in DMA No. 6, KTVU brought in an estimated $107.5 million in 2013, according to BIA/Kelsey, and KICU another $16.3 million.

In DMA No. 7, WFXT tallied an estimated $58.7 million, while WHBQ did $22.2 million in market No. 50.

KTVU’s affiliation agreement with Fox runs through June of next year, though Hoffman said its pending renewal was not a factor in negotiations for the swap.

The deal “totally fit the strategic plan” for Cox, says Hoffman: solid stations in Top 50 markets that watch a fair amount of local TV. “Well-positioned chasers—we really like that. We’ve shown we can do well in that environment,” he says, citing Tulsa and Jacksonville.

Hoffman would not say if there will be management changes atop WFXT and WHBQ, and expressed some sorrow in parting ways with the Oakland operation, which represented Cox’s largest market. “To have one go away—there’s a bit of sadness in all of this too,” he says.

That aside, Hoffman said he is “very pleased” with the arrangement.

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