CINCINNATI: E.W. Scripps has agreed to acquire the TV station group now owned by McGraw-Hill Broadcasting for $212 million. The nine stations include four ABC affiliates, rendering Scripps the largest independent operator of ABC stations with a total of 10. The deal brings Scripps’ station count to 19.
The deal is structured as a purchase of stock but will be treated as a purchase of assets for tax purposes, resulting in tax deductions created through the transaction that will be used by Scripps to reduce the net cash cost of the acquisition. The transaction is expected to be modestly accretive to Scripps’ earnings in the first full year of operations of the acquired stations.
Scripps said that because of the low interest rates currently available, it intended to finance the transaction with new debt, and has secured committed financing for the purchase price. Electing a debt-financed purchase allows Scripps to preserve its financial flexibility. The company had $153 million in cash on its balance sheet as of Aug. 31, 2011.
The McGraw-Hill stations included in the transaction comprise four ABCs--KMGH-TV in Denver, WRTV-TV in Indianapolis; KGTV-TV in San Diego, Calif.; and KERO-TV in Bakersfield, Calif. The remaining five are low-power stations affiliated with Azteca America, giving Scripps an entree into the Spanish-language market. The LPTVs include KZSD in San Diego, KZKC in Bakersfield, KZCO in Denver, KZFC in Ft. Collins, Colo., and KZCS in Colorado Springs, Colo.
“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’s portfolio that includes six ABC affiliates in Detroit, Cleveland, Phoenix, Cincinnati, Baltimore and Tampa, Fla.; three NBC’s in West Palm Beach, Fla., Kansas City, Mo.; and Tulsa, Okla.; and one independent station in Lawrence, Kan. The consolidated station group will reach approximately 13 percent of U.S. households.
“We’ve looked at several recent opportunities, but the McGraw-Hill stations were the first ones that truly energized our management team,” said Brian Lawlor, Scripps senior vice president of television. “The culture at these stations will fit well with ours.”
The transaction is subject to regulatory approvals and customary closing conditions.
~ Deborah D. McAdams
Future US's leading brands bring the most important, up-to-date information right to your inbox
Thank you for signing up to TV Tech. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.