RBR+TVBR ANALYSIS
WEST PALM BEACH — As most media industry executives know by now, there are two linear media brands that carry the Katz name. The first is Katz Media Group, the iHeartMedia-owned national advertising entity led by CEO Mark Gray. The other is Katz Networks, (pronounced “Cates”) — the Atlanta-based operation founded by Jonathan Katz.
Since late 2017, the latter entity has been wholly owned by The E.W. Scripps Co., and now it will be matrimonially paired with ION Networks, thanks to a blockbuster merger announced early Thursday.
What this means for many other companies, however, is the underreported side of this $2.65 billion transaction. That’s because some of Katz Networks’ offerings are set to migrate, creating a hole in markets such as Miami — and a potential problem for Univision.
Katz today pays leasing fees to other broadcasters for multicast distribution.
As Katz’s current distribution contracts expire, its programming will be migrated to ION stations’ digital subchannels, Scripps confirms.
ION programming will remain on the primary channel.
But, what happens to Qubo and IONPlus, the two other ION offerings?
That’s not certain, as a significant realignment of the Katz and ION programming available on over-the-air channels in several U.S. markets is set to occur.
While the decision to let current programming agreements lapse will certainly have its impact, the pending sale of 23 ION TV stations by Scripps will not. While these asset sales is expected to provide the Scripps-ION merger a clear path to closing, with Hart-Scott-Rodino and FCC approval, it is confirmed that the undisclosed buyer of the stations has agreed to maintain ION affiliations for the stations.
This negates any major shifts for ION programming. But, it does call into question where Katz Networks programs will go.
Take, for instance, Ion’s home market of West Palm Beach-Boca Raton-Vero Beach. Here, Scripps owns two properties: heritage NBC affiliate WPTV-5 and WHDT-TV in Stuart, Fla., which carries Court TV on its DT1 signal and was acquired in late 2018 from Günter Marksteiner for $25 million. WHDT uses digital Channel 34 and PSIP Channel 9.
What does ION own? WPXP-TV, which uses digital Channel 36 and PSIP virtual Channel 67 to serve the West Palm Beach market.
WPXP appears to be the property that will be sold, with all programming unchanged once the deal is completed.
Where are the Katz Networks? WPTV has sitcom-focused Laff on DT3, while it is Gray Television-owned WFLX-29, a FOX affiliate that enjoys a Shared Services Agreement with Scripps, that is home to Bounce, Court TV Mystery, and GRIT.
The more complicated scenario involves the Miami-Fort Lauderdale-Hollywood DMA.
Here, Scripps in September 2019 acquired WSFL-39 — the CW Network affiliate previously owned by Tribune Media, in a spinoff made possible by Tribune’s merger with Nexstar Media Group. As such, Scripps will now enjoy a duopoly with WPXM-35, a property that is highly unlikely to be on the divestment list.
As of today, WSFL’s digital multicast networks include Comet, Antenna TV and Katz Networks’ Court TV. Bounce is the DT2 signal associated with WAMI-69, the UniMás O&O of Univision Communications. GRIT is on WAMI-DT4. Meanwhile, Court TV Mystery and Laff are DT3 and DT4 channels, respectively, of WLTV-23, the Univision Network O&O and company flagship property.
As such, GRIT, Laff, Court TV Mystery and Bounce are set to bounce in Miami, leading Univision to figure out what to do next.
WHERE THE SALES MAY BE
RBR+TVBR went market-by-market to determine just where a combined Scripps-ION would be over the limit in regard to local ownership rules as determined by the FCC — pending any future “modernization” efforts.
Detroit sticks out as a market where an asset sale will transpire. Here, WPXD-31 will likely be sold, as Scripps owns ABC affiliated WXYZ-7 and WMYD-20, the MyNetwork TV affiliate for the market.
Another market where an asset sale is poised to occur is Kansas City, where KPXE-TV is a ION property. In this market, Scripps already owns KMCI-TV and NBC affiliate KSHB-41.
Then, there is Norfolk, where WPXV-TV is likely to be sold as Scripps owns The CW Network affiliate, WGNT-27, and CBS affiliate WTKR-3.
A fifth market ripe for divestment: Phoenix. Here, Prescott, Ariz.-based KPPX-51 is the ION station that will most likely be sold off, as Scripps’ stations in the Valley of the Sun include KASW-61 and KNXV-15, the CW Network and ABC affiliates.
What about the 18 other ION stations that would be sold?
Potential markets include Boise, Idaho; Buffalo-Niagara Falls; and Denver.
But, just where the sales will take place, and who the buyer is, awaits an FCC Form 314 filing. As of 12:45pm Eastern Thursday, this was still pending.
To view all of ION’s television stations, please click here.
