Cox Media has been pruning its portfolio, and the latest move is to send a quartet of television stations to Sinclair Broadcast Group. In one of the markets, a fifth station will be going to a partner company which will enter into a service agreement with Sinclair.
The deal is valued at $99M, and includes a $4.3M working capital deduction benefitting the buyer.
The stations include:
* Fox KFOX El Paso TX
* NBC WJAC Johnstown-Altoona PA
* Fox KRXI Reno NV
* MNT KAME Reno NV (being sold to Deerfield Media Inc.)
* NBC WTOV Wheeling WV-Steubenville OH
“Over the past 18 months, we have led the industry’s consolidation efforts in the mid-sized markets, purchasing 30 TV stations and creating over $400 million of equity value,” commented David Smith , President and CEO of Sinclair. “We believe there are many more opportunities to acquire quality assets and to unlock hidden value, including in the smaller markets, such as where the CMG stations operate. We believe our platform size and leadership position allow us to bring meaningful purchasing power and negotiating leverage to these stations. Including synergies, we believe the CMG stations can generate approximately $20 million of cash flow, on average.”
Sinclair plans to house the stations in a separate operating group under the Sinclair umbrella. Smith explained, “We have prided ourselves on being a forward-looking company with a history of creating innovative ways to unlock value for our shareholders. We have established Chesapeake TV as the primary operating entity for the CMG stations and other small market stations we may acquire, while STG will continue to be our primary operating entity for mid-sized market stations. We believe a dual operating structure is critical to the success of a small market strategy since the economics and competitive nature can differ from those of the mid-sized markets.”
Cox’s Doug Franklin also weighed in, saying “All of these media locations are valued brands with talented professionals who are committed to their audiences, advertisers and communities. We wish all of the employees well and know they will continue to work hard to produce quality entertainment, news and information for their customers and new owners.”