Scripps leapfrogs to the No. 1 independent ABC affiliate owner
MIchelle Clancy ©RapidTVNews | 05-10-2011
New UKTV co-owner Scripps has expanded its television footprint in the US by agreeing to acquire the station group now owned by McGraw-Hill Broadcasting for $212 million.
It’s a deal that will extend the Scripps relationship with ABC significantly. With 10 ABC affiliates among its expanded roster of 19 stations, Scripps will be the country's largest independent operator of ABC stations.Included in the transaction are ABC affiliates in Bakersfield, Calif., Denver, Indianapolis and San Diego, and five low-power stations affiliated with the Azteca America Spanish-language network, in Bakersfield, Colorado Springs, Colo., Denver, Ft. Collins and San Diego.In total, they reach approximately 3% of U.S. households and generated revenue in 2010 of $97 million.
"This is a terrific opportunity to enter some of America's most dynamic media markets and tap into the growing Spanish-language marketplace at a very attractive price," said Rich Boehne, Scripps president and CEO.
"The McGraw-Hill stations fit well with our strategy to create economic value through high-quality news and information content that serves both consumers and advertisers through linear television and the exploding array of digital communication devices."
The new stations join a Scripps portfolio that includes six ABC affiliates (in Detroit, Tampa, Fla., Cleveland, Phoenix, Cincinnati and Baltimore), three NBC affiliates (West Palm Beach, Fla., Kansas City, Mo., and Tulsa, Okla.) and one independent (Lawrence, Kan.).
The consolidated station group will reach approximately 13% of U.S. households. "These stations came up for sale at a good time for Scripps," Boehne said.
"The deal is structured and financed in ways to protect the company's financial flexibility and our ability to continue investing in emerging media business models. Through this acquisition, we now have the opportunity to extend our local news strategies into markets with big appetites for community-changing journalism.
"The deal is structured as a purchase of stock but will be treated as a purchase of assets for tax purposes, funded with new debt. However, the transaction is expected to be modestly accretive to Scripps' earnings in the first full year of operations of the acquired stations. Scripps had $153 million in cash on its balance sheet as of 31 August, 2011.
The transaction is subject to regulatory approvals and customary closing conditions.