Tribune Co. has agreed to acquire Cincinnati-based Local TV LLC for $2.725 billion in cash, the companies announced today. The deal will add 19 television stations in 16 markets to Tribune Co.’s television portfolio. The deal makes Tribune the largest commercial television station owner in the U.S., with 42 properties across the country.
“This is a transformational acquisition for Tribune. It makes us the No. 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,” Tribune Co. CEO Peter Liguori said in a statement. “We couldn’t be more excited about Tribune’s future as America’s leader in creating and distributing original content and local news programming.”
Several originally mostly newspaper oriented companies, like Tribune, are trying to build out video and digital operations and move away from newspapers. The Tribune Local TV deal comes less than a month after Gannett agreed to buy the Belo Corporation for about $1.5 billion, nearly doubling its local television holdings.
Tribune Co. owns 23 television stations including WGN-Ch. 9 in Chicago, KTLA in Los Angeles and WPIX in New York. The Chicago-based media company also owns national cable channel WGN America, WGN Radio and eight daily newspapers including the Chicago Tribune and Los Angeles Times, among other holdings. The acquisition of Local TV will add stations in Denver, Cleveland, St. Louis, Kansas City, Salt Lake City and Milwaukee. Once the deal is completed, Tribune Co. will own 14 stations in the top 20 markets, and become the largest Fox affiliate group in the U.S.
Principally owned by private equity firm Oak Hill Capital Partners, Local TV was launched in 2007 with the acquisition of nine TV stations from the New York Times Co. In 2008, Local TV purchased eight Fox-owned stations from News Corp.
Local TV’s inaugural CEO was Randy Michaels, who left within the first year to join Tribune Co., where he rose to CEO while the company was in Chapter 11 bankruptcy before being forced out in 2010.
“Local TV and Tribune have had a long, successful relationship over the last five years,” Bobby Lawrence, CEO of Local TV, said in a statement. “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.”
Tribune Co. has received financing commitments of up to $4.1 billion from JPMorgan Chase, Bank of America, Merrill Lynch, Citigroup, Deutsche Bank and Credit Suisse, including a new $300 million revolving credit facility and the capacity to refinance its existing debt. JPMorgan owns about 9 percent of Tribune Co., which emerged from Chapter 11 bankruptcy in December.
The transaction has been approved by the boards of both companies and is expected to close before the end of the year, subject to antitrust and Federal Communications Commission approvals, according to Tribune Co.
At the same time, Tribune is weighing a potential sale or spinoff of its newspaper properties, including The Chicago Tribune and The Los Angeles Times and several Spanish-language newspapers (including Hoy Chicago and Los Angeles as well El Sentinel in Florida). Advisers of Tribune have been in touch with potential bidders, ranging from the Koch brothers to the billionaire Eli Broad.
Several companies that were originally mostly newspaper oriented companies, like Tribune, are trying to build out video and digital operations and move away from newspapers. The Tribune Local TV deal comes less than a month after the Gannett Company, the largest newspaper owner in the U.S., agreed to buy the Belo Corporation for about $1.5 billion, nearly doubling its local television holdings. Such consolidation is intended to help media companies gain more scale, giving them additional negotiating clout with broadcast partners.