If there was any doubt about Tribune’s strategic plan to emphasize its broadcast business over its newspaper business, it has just been erased – the company says its $2.725B acquisition of Local TV will make it the #1 television group in the nation.
All in all, it is getting 19 stations in 16 markets which will in general expand the national footprint of the group. Interestingly, there are only two markets in which the two companies have television station overlap – Denver and St. Louis – and in both cases, Local is running the Tribune station in an LMA.
Tribune’s stations are in many of the nation’s largest markets but tend to be affiliated not with one of the Big Four networks, but rather with CW. Local, on the other hand, has a very strong interest in Fox as well as stations here and there from the other members of the Big Four as well. Tribune notes that Local tends to be #1 or #2 in terms of revenue in most of its markets, so the acquisition will immediately being pumping cash into the company.
Tribune President/CEO Peter Liguori said, “Since joining Tribune in early 2013, we have been setting the strategic foundation to transform Tribune and help chart the path forward—building our multimedia capabilities and asset portfolio to become the country’s leading independent content creator and distributor. This is a transformational acquisition for Tribune—it makes us the #1 local TV affiliate group in America, expands the distribution platform for our high-quality video content, and extends the reach of our digital products to new audiences across the country. We couldn’t be more excited about Tribune’s future as America’s leader in creating and distributing original content and local news programming.”
Added Bobby Lawrence, Chief Executive Officer of Local TV, “Local TV and Tribune have had a long, successful relationship over the last five years. Our cultures and operating philosophies are very similar, and we share a strong commitment to news and local programming excellence. My management team will dearly miss working with some of the most talented and dedicated people in broadcasting, but we know we leave our employees in good hands. I am grateful to our partners at Oak Hill Capital, who acquired the finest stations in the industry and helped us build this great company.”
Tribune provided the following breakdown of the deal: “Tribune’s broadcast portfolio will increase from 23 to 42 stations, and include 14 CW affiliates, 14 Fox affiliates, 5 CBS affiliates, 3 ABC affiliates, 2 NBC affiliates and 4 independents. Tribune will own 14 stations in the country’s top 20 markets. It will become the #1 Fox affiliate group, expand its position as the #1 CW affiliate group, and add market-leading stations in prime cities such as Denver, Cleveland, St. Louis, Kansas City, Salt Lake City and Milwaukee.Tribune anticipates the combination with Local TV will generate more than $100 million in annual run-rate synergies within five years after closing.”
Tribune will acquire financing and also chip in cash on hand to accomplish the purchase.