Gray Completes Its Raycom Media Merger

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For the last time, we present to you the Raycom Media logo. That’s because Raycom no longer exists — it has been officially swallowed by Gray Television in a merger making it the No. 2 broadcast company in the U.S., pending Nexstar’s merger with Tribune Broadcasting.


In an announcement made Wednesday afternoon, Gray confirmed has consummated its “transformative transaction” with Raycom.

And, in connection with the Raycom Merger, Gray and Raycom completed the divestitures of nine television stations in overlap markets consistent with the parties’ June 25, 2018, joint announcement of their merger.

In one of the two divestment deals, TEGNA completed its previously announced acquisition of WTOL, the CBS affiliate in Toledo, and KWES, the NBC affiliate in Midland-Odessa, Tex., from Gray for $105 million in cash.

Concurrently, The E.W. Scripps Company closed on its acquisition of three ABC-affiliated television stations in Florida and Texas owned by Raycom Media and announced new leadership for both markets.

KXXV and KRHD in Waco-Temple-Bryan, Tex., and WTXL in Tallahassee, Fla., were acquired for $55 million. The acquisitions expand Scripps’ holdings to 36 TV stations in 26 markets and increase its U.S. TV household reach to 18.5 percent.

Matt Brown will serve as VP/GM for WTXL He has been news director for WFTS, the Scripps station in Tampa. Adam Chase will serve as VP/GM for KXXV and KRHD in Waco, Texas. He has served as VP/GM for KERO, the Scripps station in Bakersfield since 2016, and has worked in TV and radio since 2004.

KXXV and KHRD are the company’s first stations in Texas. Adding WTXL expands the company’s presence in Florida, which already includes the Fort Myers, West Palm Beach and Tampa markets. The transaction is structured as a purchase of assets and was funded with cash on hand. It is expected to be accretive to earnings in the first full year Scripps operates the acquired stations.

These station divestitures satisfy the conditions placed on the merger by the Antitrust Division of the U.S. Department of Justice and the Federal Communications Commission.

In addition, immediately prior to the Gray/Raycom closing, Raycom completed the spin-offs to its shareholders of two of its wholly owned subsidiaries, CNHI and PureCars Automotive.

Gray’s acquisition of Raycom completes Gray’s transformation from a small, regional broadcaster to a leading media company with nationwide scale.

In fact, Gray now owns the first or second-highest rated television station in 85 markets, according to Comscore’s audience measurement data between December 2017 and November 2018.

Gray owns and/or operates television stations in 91 television markets, including a video program production, marketing, and digital businesses that now includes Raycom Sports, Tupelo-Raycom, and RTM Studios, the producer of PowerNation programs and content.

Upon the closing, Hilton Howell became Gray’s Executive Chairman and co-CEO. That’s because Pat LaPlatney, formerly Raycom’s President/CEO, became Gray’s President and Co-CEO.

In addition, Raycom’s prior President/CEO, Paul McTear, joined Gray’s Board of Directors.


How does the rest of the C-Suite look?

  • Bob Smith, Gray’s COO/Local Media, oversees station operations and reports to LaPlatney.
  • Raycom’s Sandy Breland and Brad Streit are joining Matt Jaquint, Mike King, Nick Matesi and Chris Mossman in their new positions as Senior Vice Presidents of Local Media.
  • Jim Ryan continues in his role as Chief Financial Officer, reporting to Hilton.
  • Jay Cowart and Vance Luke continue in their roles as Vice President and Chief Accounting Officer, and Vice President, Controller, respectively.
  • Gray promoted Sabra Cowart to Vice President, Accounting/Finance, as Becky Sheffield, formerly of Raycom, joins Gray as Vice President, Controller.
  • Kevin Latek continues in his role as Chief Legal and Development Officer, reporting to Hilton.
  • Ellenann Yelverton, formerly of Raycom, is now Gray’s Vice President and Deputy General Counsel, overseeing Gray’s legal department.
  • Rob Folliard is now Vice President, Government Relations and Distribution.
  • Nick Waller continues in his role as Chief Administrative Officer, reporting to LaPlatney. He will continue to focus on integration of the companies as well as overseeing internal performance analysis and reporting, technology, capital projects, human resources, programming, and traffic.
  • Greg McCastle serves as Senior Vice President, Sales Strategy and Development, reporting to LaPlatney. Greg oversees the Health and Auto verticals, as well as advertising business development efforts.
  • Cary Glotzer continues in his role overseeing Tupelo-Raycom
  • Hunter Nickell continues to oversee Raycom Sports and RTM Studios.
  • Dave Burke, formerly of Raycom, is Gray’s new Senior Vice President and Chief Technology Officer.
  • Dianne Wilson, also formerly of Raycom, is Gray’s new Vice President, Employee Relations
  • Greg Conklin continues in his role as Gray’s Vice President, Programming.

 

Finally, effective upon the closing, Gray promoted Mike Braun to Senior Vice President, Gray Digital Media; Becky Meyer to Senior Vice President, National Sales; Mike Jones to Vice President, Political Sales; and Karen Youger to Vice President, Sales Operations, overseeing Traffic, the Programming Hub, and Matrix.

UPDATED ESTIMATES

Gray is still completing its year-end financial close and finalizing its financial results for 2018. Nevertheless, in light of the transactions noted above, Gray provided certain preliminary, unaudited information based on, among other factors, Gray’s estimates for Q4 2018 and Raycom’s preliminary internal forecasts for 2018.

Accordingly, subject to the foregoing qualifications and giving effect to the Raycom Merger and related transactions as if completed on December 31, 2018:

 Outstanding Debt – Gray’s aggregate principal amount of debt outstanding would have been $3.970 billion.
 Cash on Hand – our available cash on hand would have been approximately $240 million.
 Leverage Ratio – our debt to operating cash flow ratio (as defined under our senior credit facility but including the previously announced $80 million of anticipated first year annualized synergies expected from the Raycom Merger and excluding associated transaction costs), net of all cash on hand, is estimated to have been in a range of approximately 4.75 and 5.0 times.

“These estimates incorporate certain non-GAAP financial measures that are dependent on financial results that are not yet determinable with certainty,” Gray said. “We are unable to present a quantitative reconciliation of the estimated non-GAAP financial measures to their most directly comparable GAAP financial measures because such information is not available and management cannot reliably estimate all of the necessary components of such GAAP measures without unreasonable effort or expense. In addition, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors.”

 

 

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