‘KQ2’ Sale Shatters Former Cross-Ownership Prohibition

0

On November 16, 2017, the FCC took a bold step in its GOP-fueled rule “modernization” efforts by voting 3-2 to eliminate its cross-ownership rules for newspaper and broadcast media and for radio and TV, respectively. The “Eight-Voices Test” was also erased.


On March 27, one of the biggest transactions to result from the rule’s disappearance was signed off, with a Form 314 filing made with the Commission late Thursday (4/4).

The deal involves the ABC affiliate serving St. Joseph, Missouri, a city of 75,000 some 40 minutes to the north of Kansas City International Airport, once owned by Nexstar and now being sold by an entity led by a former Gray C-Suiter.

For $13,650,000, Heartland Media is selling KQTV-2 to News-Press & Gazette Company (NPG).

It’s a major acquisition for NPG, which owns or operates 45 TV network affiliates in addition to four radio stations in such markets as El Paso; Monterey-Salinas, Palm Springs and Santa Barbara, Calif.; Colorado Springs; Idaho Falls; Bend, Ore.; Yuma, Ariz.; and two Missouri markets, including Columbia.

The other Missouri market is St. Joseph, where NPG is headquartered.

In fact, NPG is already a dominant media player in St. Joseph. Here, it owns the daily News-Press, with roots dating to 1845.

Perhaps more importantly in the digital age is NPG’s ownership of three LPTV facilities serving St. Joseph: FOX affiliated KNPN-LD 26, NBC affiliated KNPG-LD 21, and CBS affiliated KCJO-LD 30.

Operation of the three stations has allowed NPG to pioneer a converged newsroom that combines the efforts of TV news reporters and staff with those of the local newspaper.

Now, it will add “KQ2” to the mix — a move that is already resulting in negative social media comments from viewers about NPG’s “monopoly” in St. Joseph MSA, comprised of Andrew, Holt, and Buchanan Counties in Missouri and Doniphan County, Kansas.

That’s because NPG also operates “St. Joseph’s CW 6,” which is housed on the LD-2 channel associated with KNPG; and has Telemundo programming on KNPG’s LD-3 signal.

Despite its proximity to Kansas City, St. Joseph has long enjoyed its own locally focused media, including 100kw Top 40 KKJO-FM 105.5, which reaches the northwestern portion of the Kansas City metropolitan area. Vice-versa, just one Kansas City-based FM — KCKC-FM 102.1 — enjoys city-grade coverage of St. Joseph.

Therefore, while one may be able to receive Kansas City’s TV stations with a powerful HD antenna, NPG’s stations enjoy near exclusivity on Rainbow Communications‘ lineup for Doniphan County. NBC coverage is also available via the lone Kansas City station available, Scripps’ KSHB-41.

In St. Joseph, Suddenlink Communications is the dominant cable TV services provider. Here, all NPG stations except the CW affiliate enjoy exclusivity; KQ2 must attract those who do not wish to watch Hearst-owned KMBC-9 in Kansas City.

A 10% escrow deposit has been made to Heartland Media, which lowers its station portfolio to 10 with the sale of KQ2. The deposit is being held by UMB Bank.

The sale of KQ2 comes 26 months to the day that the company, led by President/CEO Bob Prather, completed its purchase — along with four stations — from Nexstar Media Group and Media General. Joining Heartland in the acquisition was Anthony Hauser’s MSouth Equity Partners.

Heartland was formed in October 2013 by Prather, who exited as Gray Television’s President/COO in June 2013.

There is no broker or finder associated with KQ2’s sale to NPG.

“We are excited to bring KQ under local ownership,” NPG CEO David Bradley said in a statement released Thursday to KQ2. “Our family has been committed to providing the best local news and information to the St Joseph area for more than 60 years. That history includes ownership in KQ back in the late 1950s.”

Prather commented, “We have enjoyed working with the KQTV staff. The station is an even stronger market leader than when we purchased it. This is a unique opportunity for locally based ownership to continue the long tradition of KQTV’s service to its community.”

For those concerned about consolidation and job cuts, Bradley says KQ2 and NPG “will continue to be distinct news brands honoring their rich history of providing local coverage and community service throughout Northwest Missouri and Northeast Kansas. The resources of the newsrooms will produce 42 hours of news and local programming each week, as well as offer local businesses marketing/advertising services on all platforms.”

That may not convince some locals. David Dean noted on KQ2’s website, “FCC Should not approve this sale. NPG had to divest itself of Cablevision because of monopoly concerns by the FCC. This is no different because if this goes through, the only TV station the Bradleys will not own will be the local TBN affiliate–which probably has a viewership of fewer than 1000 homes in the community.”

Viewer Steven Siebern wrote, “Now the Bradleys will own all local stations; they will have a monopoly. This is about Bradley’s greed and it is the end of competition in news in St. Joseph.”

Since the November 2017 FCC vote, scant other deals of size have been seen, illustrating the rare instance in 2019 where a newspaper owner would wish to own a broadcast media property.

In May 2018, Grand Junction Media entered into an agreement to acquire Class C2 KGJX-FM 101.5 — branded as “Redrock 101.5” and airing an Oldies format from Redrock Radio Group. Grand Junction Media owns The Daily Sentinel, the main newspaper serving the city of Grand Junction, Colo.

The FCC’s 42-year-old broadcast ownership rules limited a single entity’s ownership of television, radio, and newspaper properties within a local market — rules codified and finalized when “The Hustle” was America’s favorite dance and Captain Fantastic and The Brown Dirt Cowboy was a best-selling LP for Elton John.