Gray Spins Land With Lockwood, TEGNA, Scripps

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On August 16, RBR+TVBR was first to report that Gray Television would be divesting a station in the Albany, Ga., market to Brian and Patricia Lane‘s Marquee Broadcasting.


On late Monday evening, the Georgia-based broadcast TV company that seeks to win government approval of its merger with Raycom Media announced who will be picking up the other eight stations selected for divestment by Gray.

While Marquee grabbed WSWG-44 in Albany, Ga., Gray has agreed to a deal with Lockwood Broadcasting to allow the Hampton Roads-based company to purchase Fox affiliates WTNZ-TV in Knoxville; WFXG-TV in Augusta, Ga.; WPGX-TV in Panama City Beach, Fla.; and WDFX-TV in Dothan, Ala.

At the same time, The E.W. Scripps Company has agreed to buy ABC affiliates KXXV-TV/KRHD-TV in the Waco, Tex. market, and WTXL-TV in Tallahassee, Fla.

The transaction is structured as a purchase of assets, and it will be funded with cash on hand; no debt financing will be required. It is expected to be accretive to earnings in the first full year Scripps operates the acquired stations.

“Scripps’ acquisition of these two stations is in line with the strategic vision we set out early this year: to strengthen our portfolio of local television stations while delivering value to shareholders,” said Scripps President/CEO Adam Symson. “In addition to expanding our household reach and deepening our strong relationship with ABC, this transaction expands our political footprint in key battleground states leading up to the 2020 elections.”

The purchase of the Waco and Tallahassee properties comes following the August 15 announcement that it is officially out of the radio business, with SummitMedia purchasing the remaining 19 stations it had on the market. The completion of its sale of its 34 radio stations brought in $83.5 million for Scripps.

This leaves two station needing a new owner. That was resolved thanks to TEGNA, the company formerly known as Gannett. It is purchasing CBS affiliate WTOL-TV in Toledo and NBC affiliate KWES-TV in the Odessa-Midland, Tex. market DMA.

“WTOL and KWES are strong, leading local media brands, with deep roots in their community. They are an excellent strategic and financial fit with our portfolio,” said TEGNA President/CEO Dave Lougee. “As we’ve seen with the results of our recent acquisition of KFMB in San Diego, TEGNA has a proven track record of acquiring highly attractive assets that create value for shareholders. We continue to invest in growth and remain well positioned to capitalize on consolidation opportunities that are both strategic and financially prudent.”

Gray says the total price for the nine stations it is selling comes in at $235.5 million.

This exceeds the company’s initial estimate for what it would attract for the 8 Gray stations and 1 Raycom property slated for sale.

“By divesting television stations in each of the nine overlap markets, Gray ensures that the Gray/Raycom combination will not reduce competition in those local markets and otherwise complies with regulatory requirements,” the company said.

Gray will not have any joint sales, joint retransmission, shared services, or local marketing arrangements with any divested station.

Additionally, Gray will not hold an option to repurchase any divested station, nor will Gray finance or guarantee any purchaser’s indebtedness.

In short, following consummation of the transactions, the divested stations will operate independently of Gray and under the full control of their new owners.

The proposed divestitures will close concurrently with the closing of the Gray/Raycom transaction, which Gray anticipates will occur following the receipt of regulatory and other approvals in the fourth quarter of 2018.

Wells Fargo Securities served as financial advisor and Cooley LLP served as legal counsel for Gray in connection with the divestiture process.