Brokers may have lamented that there were not as many individual station deals in the television industry in the past 12 months as in previous years. But the transactions in 2001 were significant, with a few station-group deals likely to have profound effect on the industry.
Using data pulled together by BROADCASTING & CABLE, BIA Financial and the station groups themselves, the annual list of the Top 25 tabulates each group's stations and their DMAs, with the 50% FCC discount for UHF, to rank the groups by household reach.
Changes from last year are due to changes not only in the number of stations but also in the sizes of the markets.
In most cases, the Top 25 groups are part of large, diverse companies with extensive media holdings. How wide is the reach of the Top 25 groups? Even the newly combined 40-station Benedek and Gray groups, merging in a recently announced deal, couldn't quite crack the list.
Several deals pursued the synergies of duopoly, even reconfiguring sales formulas to factor in the power of the combos. When No. 1 Viacom paid $650 million for Los Angeles independent KCAL(TV), seller Young noted that the station sold at a multiple of 32 times its 2001 cash flow of just over $20 million, while buyer Viacom—which already owns KCBS-TV Los Angeles—said the number would be about 12 times expected cash flow for its new No. 2-market duopoly.
KCAL was clearly the biggest single-station deal, and Young came close to being part of the top two such deals. Industry watchers spent the last days of 2001 watching NBC go back and forth in the San Francisco Bay Area between Granite's about-to-become-an-NBC-affiliate KNTV(TV) San Jose and Young's powerhouse KRON-TV San Francisco, which was about to become independent because of a disagreement with the network over reverse compensation. But Young couldn't get NBC to pay a KCAL-size price for the No. 5-market station the network had once coveted.
But busy NBC, which had already reached an agreement to purchase Spanish-language network Telemundo, did not walk away empty-handed, acquiring Granite's KNTV for a few hundred million less and giving up a few hundred million in reverse-compensation commitments. With KNTV moving into NBC's group, each of the Big Three networks' station groups now had a station—or two—in each of the top five markets.
NBC's big acquisitions not only strengthened the group's numbers among the top 25 but took Telemundo off the list—technically—as well as Granite. Beyond the Telemundo acquisition, the increasing influence of the Hispanic market is reflected in the addition of Spanish-language Azteca America and TeleFutura affiliates.
Bounding onto the list this year were major religious broadcaster Trinity Broadcasting Network and Clear Channel. The latter maneuvered for duopolies and for a station in its San Antonio home market and took over the Ackerley group in one of the year's biggest deals.
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