Trend of broadcast companies consolidating and changing hands could mean better economy
Television station consolidations and sales have been a major theme over the last several months, with newspaper companies like Gannett and Tribune also getting more deeply into the broadcast mix. Here’s a look at the changing of hands and consolidations from the last quarter:
- In May, Robert Allbritton informed his staff that he would be exploring the sale of their television group to focus more on the popular political news site Politico. He noted at the time that the site was his future, and he had plans to invest in other similarly modeled media companies, noting that Politico carried no debt and will turn a profit again in 2013. On Monday, it was announced that Allbritton Communications had reached an agreement with the Sinclair Broadcast Group to sell Perpetual Corporation and Charleston Television for $985 million, with the deal closing by the end of the year. The stations include News Channel 8, WJLA-TV in Washington, D.C., WBMA-TV, WCFT-TV and WJSU-TV in the Birmingham, Ala., area, WHTM-TV in Harrisburg, Pa., KATV-TV in Little Rock, Ark., KTUL-TV in Tulsa, Okla., WSET-TV in Lynchburg, Va., and WCIV-TV in Charleston, S.C. Julie Holley, managing editor of TV content at Vocus Media Research Group, noted that the Allbritton sale was a long time coming. “Even when I worked at Newschannel 8, there were inklings that the Allbrittons wanted to sell,” she said.
- Sinclair Broadcasting is certainly gobbling up television stations, most recently Allbritton’s group, but also in April when it agreed to purchase Fisher Communications for $373 million. The acquisition of Fisher’s 20 television stations in eight different markets and three radio stations would put Sinclair in a position to reach more than a third of U.S. households with a television, reported Reuters.com. The purchase also opens up new markets to the group, including Seattle and Portland, and it is expected to close in the third quarter.
- Meanwhile, publishers primarily known for their newspaper holdings have been pursuing TV more aggressively, including Media General, which made its departure from the newspaper business last year when it sold 63 publications to Warren Buffett’s Berkshire Hathaway and finalized the exit when it sold the Tampa Tribune in October. In June, Media General came to a merger agreement with New Young Broadcasting, slated to close by the end of the year. The two entities will form a new TV broadcasting company with 30 stations in 27 markets under the Media General name. According to Reuters, New Young’s contribution is 12 stations.
- For the last few months, it looked as if the Tribune Company was going to take the Media General road and shed its newspapers, including the Baltimore Sun and Chicago Tribune. Instead, the media group is backing off a sale for the moment, and instead splitting its broadcast group and publishing group into two entities. This comes on the heel s of Tribune’s purchase of Local TV LLC for $2.725 billion. Tribune adds 19 television stations in 16 markets with the acquisition, augmenting its additional 42 properties and making it the largest commercial television station owner in the U.S. The newspaper company will be headed under Tribune Publishing Co., while the television company will remain under the Tribune Company name.
- Earlier this month, Gannett acquired the Belo Corporation, almost doubling its stations from 23 to 43 and making it the U.S.’ fourth largest owner of major network affiliates, Forbes.com reported. The deal is slated to close by the end of the year. “I think this acquiring of TV stations will allow the Gannett and Tribune brands to branch out past the newspaper/online world and into the world of broadcast,” said David Coates, managing editor of newspaper content at Vocus Media Research Group.
As established newspaper publishers move increasingly into the realm of online and broadcast, we’ll most likely continue to see wealthy, newspaper barons like Warren Buffett take hold of the newspaper industry. Meanwhile, the recent changing of hands and consolidations between media groups is an indicator that the economy is better than it was a few years ago, noted Holley. “I think companies are willing to take risks again, if there is a potential gain. Many TV stations shed staff over the last few years. They made a lot of cost saving measures. If sales are up because of a better economy, they probably have more money available to invest,” she said. “It will be interesting to see if the FCC approves all of these, and it will be interesting to see how news coverage is affected. The more content shared across the country could mean we get more diverse content or it could mean that we all see the same content. Time will tell.”
–Katrina M. Mendolera
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