Sinclair continues spending spree with four more TV stations
Michelle Clancy | 27-02-2013
Sinclair Broadcast is buying four US television stations owned by Cox Media Group for about $95 million, and will also provide sales services to another station in the latest in a string of deals through which Sinclair continues to build its footprint.
"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," said 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."
The five stations are located in four markets (El Paso; Johnstown/Altoona, Pennsylvania; Wheeling, West Virginia/Steubenville, Ohio; and Reno, Nevada) and reach 0.9% of the US TV households.
Due to FCC ownership restrictions, Sinclair will also continue providing the services to KAME in Reno that CMG has historically provided. The licence assets of KAME will be purchased by Deerfield Media.
The transaction is subject to approval by the FCC and antitrust clearance. It is expected to close in the second quarter of 2013, subject to closing conditions.
"We have prided ourselves on being a forward-looking company with a history of creating innovative ways to unlock value for our shareholders," Smith said. "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."