An Apollo Launch For Meredith TV Properties?

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Leave it to “people familiar with the matter” to spark another round of wild speculation and light a fire under the feet of now-nervous staffers at some 17 television stations across the U.S.


According to Reuters, a company best known for its female-friendly lifestyle brands and magazine titles is pitching its broadcast TV properties in a manner that echoes what Cox Media Group just did.

Unnamed sources tell Reuters that Meredith Corp. is exploring the spin of the core components within its Local Media Group.

This is Meredith’s broadcast and digital arm, and includes the following properties:

  • FOX affiliate KPTV-12 and MyNetworkTV KPDX-49, branded as “FOX 12+” in Portland, Ore.
  • FOX affiliate KVVU-5 in Las Vegas
  • CBS affiliate KPHO-5 and news-focused unaffiliated KTVK-3 in Phoenix
  • CBS affiliate KCTV-5 and MyNetwork TV affiliate KSMO-62 in Kansas City
  • CBS affiliate KMOV-4 in St. Louis
  • FOX affiliate WALA-10 in Mobile, Ala.-Pensacola, Fla.
  • CBS affiliate WFSB-3 in Hartford and ABC affiliate WGGB-40 in neighboring Springfield, Mass., where WSHM-LD offers CBS programming as a semi-satellite of WFSB.
  • NBC affiliate WSMV-4 in Nashville
  • FOX affiliate WHNS-21 in Greenville-Spartanburg
  • CBS affiliate WNEW-22 in Saginaw-Bay City, Mich.
  • Unaffiliated WPCH-17 (the onetime WTBS-TV) and CBS affiliate WGCL-46 in Atlanta.

Interestingly, WGCL recently announced that on May 22 it will be saying goodbye to its primary news anchor, Sharon Reed. Reed had been with the station since June 2015, and her departure could be tied to a potential deal Meredith is pitching.

But, to who?

Reuters’ unnamed sources say private equity firm Apollo Global Management LLC is already interested in the group of properties.

If Apollo were to swoop in and take Meredith’s TV stations as part of a spin-off, taking them private, Reed’s colleagues in Atlanta could be in for a mild shakeup.

With the 17 Meredith station possibly fetching as much as $2 billion, Meredith could have plenty of cash to pay for its $2.8 billion acquisition of Time Inc. — a deal that solidified the Des Moines-based company’s mission to excel in the worlds of nationally distributed glossy publications and digital media, perhaps its biggest growth engine.

At the dawn of ATSC 3.0 and the voluntary roll-out of the next-gen broadcast TV standard, multimedia companies like Meredith could be weighing the benefits of further ownership in the medium — and the cost associated with any shift from ATSC 1.0.

Or, more likely, Meredith is simply reacting to a market where consolidation is en vogue and can come at a good price. With Time and Fortune sold off and Sports Illustrated on the market, a leaner Meredith focused on such venerable brands as People, Better Homes & Gardens, SHAPE, In Style, Entertainment Weekly, and other food and family brands targeting women appears to be the winning game plan.

MEREDITH’S NORTHWEST PASSAGE, WITH COX?

On February 15, Apollo Global Management said it would take a majority interest in Cox Media Group’s TV stations, the Dayton Daily News, and CMG’s radio properties in the Miami Valley. It took until March 6 for the $3.1 billion price tag to become known, thanks to Form 314 filings with the FCC.

All of Cox’s TV stations, the newspaper, and its Dayton radio stations are being spun to an entity named Terrier Media Buyer Inc.

Should Reuters be correct and Apollo successfully snatch Meredith’s properties, they presumably would be placed under Terrier.

That entity also includes stations formerly owned by the Brian Brady-helmed Northwest Broadcasting, which was acquired by Terrier for $340 million.

Should the Cox Media and Northwest Broadcasting deals receive regulatory, Terrier Media will own 25 full-power television stations covering (without application of the UHF Discount) 12.949% of U.S. television households.

The FCC is accepting through May 10 Petitions to Deny these transactions as part of MB Docket No. 19-98, with an Opposition Date of May 28 and Reply Date of June 4. As of May 2, no Petitions to Deny have been filed with the Commission.

If the Meredith stations were to join the Cox properties, Terrier would be a formidable group with stations (from Cox) in Orlando, Jacksonville, Memphis, Dayton, Tulsa, Pittsburgh, Seattle-Tacoma, Boston, Charlotte and Atlanta.

Add in the Northwest markets of Spokane, Yakima and the Tri-Cities, and Terrier would instantly become a major player in the state of Washington. Further, it would add Medford, Ore., to its Portland operations, while taking on properties in Syracuse and Binghamton, N.Y.; Yuma, Ariz., which could see shared and/or merged operations with Phoenix stations KPHO and KTVK; Eureka-Arcata, Calif.; Pocotello, Idaho; Alexandria, La.; and Greenville-Greenwood, Miss.

It’s a perfect fit for Terrier — except in Atlanta. That’s because ABC affiliated WSB-2, Cox’s flagship TV property, would become a sibling to WGCL-46 and WPCH-17.

With the FCC’s 2018 Quadrennial Review of its ownership rules poised to consider a relaxation of its “top-four prohibition,” Terrier could eventually have no problem owning both WSB-2 and WGCL-46. That is, if organizations including the American Television Alliance (ATVA) fail to sway the Commission against such a move.

Meredith Corp. representatives declined to comment on the Reuters report when contacted by RBR+TVBR.

Meredith’s Local Media Group in fiscal Q2 2019 enjoyed revenue of $262.4 million, rising from $170.3 million a year earlier. Adjusted EBITDA was $116.2 million, soaring from $58.3 million.

Apollo Global Management is a publicly traded U.S. company that has $280 billion in assets under its management as of December 31, 2018, and was founded in 1990. It currently has over 1,000 employees around the world.

What it doesn’t have are spinoffs from Nexstar Media Group‘s intended merger with Tribune Media.

Apollo Group had been widely reported, thanks to Reuters, as one of the key entities likely to get necessary divestitures from the Nexstar/Tribune wedding. However, TEGNA acquired 11 of those stations for $740 million, while The E.W. Scripps Co. paid $580 million to grab eight spin-off stations in seven markets.

These markets include Phoenix, where Scripps is now poised to compete against Meredith. Apollo’s new plan would see it now compete against the property Scripps snapped from Nexstar, The CW Network affiliate KASW-TV, and ABC affiliate KNXV-15.

At the same time, Apollo would now compete against TEGNA’s WTIC-61, the FOX affiliate in Hartford-New Haven, and The CW affiliate WCCT-TV, with an arguably stronger WFSB-3, the heritage CBS station serving Connecticut.

Talk of an Apollo deal for the 17 TV stations comes nearly 3 1/2 years after Meredith agreed to terminate its September 2015 merger agreement with Media General — paving the way for Nexstar to make its own bid for the company, which had been under financial strain for two decades.

On the Reuters report, Meredith shares were up 2.1% to $59.54 at 11:10am Eastern.