TVNewscheck Exclusive

Big Deals = Big Changes In Station Groups

A plethora of mega-deals over the last 12 months has reordered TVNewsCheck's annual ranking. While the top three spots remained the same as last year — occupied by Fox, CBS and Sinclair — the rest of the top 10 is much changed with five companies gone through M&A activity.

The past 12 months have seen a frenzy of station acquisitions among the biggest television station group owners that resulted in five of last year’s top 25 companies leaving the list through mergers. They are Allbritton, Belo, LIN, Local TV and Young.

TVNewsCheck’s annual ranking of the Top 30 is based on advertising revenue estimates for 2013 provided through an exclusive arrangement with BIA/Kelsey.

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The rankings are based on advertising estimates alone, and do not include other revenue from retransmission consent fees and websites and other digital ventures.

Also, although the estimates are for 2013, the station groups are credited for revenue for all stations they own and operate as well as for any stations they announced they are acquiring between May 23, 2013, when the last Top 30 was posted, and April 30, even if the deals have not closed.

Despite all the changes, the top three spots remained the same with Fox first, CBS second and Sinclair third.

After that, however, there was plenty of movement among the top 10. Last year’s No. 4, ABC/Disney dropped to No. 7; Gannett climbed from No. 6 to No. 4 this year; Hearst dropped from No. 7 to No. 9; Tribune climbed from No. 8 to No. 6; Univision slipped from No. 9 to No. 10.

Brand Connections

Media General recorded the biggest rise on the list, jumping from No. 17 last year to No. 8, largely because of its announced $1.6 billion merger with LIN. While that deal is awaiting FCC approval, the resulting Media General would have 74 stations in 46 markets and coverage of 23% of all TV homes.

TV's Top 30 Group Owners

Rank Group 2013 Rev
1. Fox $1,671,250
2. CBS $1,502,125
3. Sinclair $1,344,700
4. Gannett $1,303,900
5. Comcast/NBCU $1,294,125
6. Tribune $1,228,850
7. ABC/Disney $1,020,250
8. Media General $972,100
9. Hearst $726,000
10. Univision $697,000
11. Raycom $614,325
12. Cox Media $522,650
13. Nexstar $502,075
14. Scripps $457,775
15. Meredith $387,275
16. Gray $344,450
17. Post-Newsweek $261,200
18. Sunbeam $206,600
19. Journal $163,325
20. Entravision $125,650
21. Hubbard $117,350
22. Quincy $108,675
23. Cordillera $99,425
24. Schurz $90,450
25. Ion Media $90,075
26. Weigel $82,325
27. Dispatch $82,025
28. Berkshire Hathaway $71,100
29. Griffin $69,075
30. Capitol $66,500

At the end of March, the FCC threw a monkey wrench into the station sale process when Chairman Tom Wheeler won a 3-2 vote that changed the commission’s rules so that TV broadcasters generally may not form new joint sales agreements in which one station sells 15% or more of the advertising time of another separately owned station in the same market. Many broadcasters have been using JSAs exceeding 15%, usually in concert with shared services agreements, to operate second TV stations in markets where outright ownership is prohibited by agency rules.

By TVNewsCheck’s count, deals valued at more than $3 billion are lodged in the FCC bureaucracy because of JSA and SSA issues. The biggest part of that total is the $1.6 billion attached to the merger of Media General and LIN. The parties tried to engineer that deal around the new thinking at the FCC. But who can say exactly what the thinking is? Both companies have pre-existing sidecar deals built on JSAs and SSAs that could gum up the works.

Deals in limbo include Sinclair Broadcast Group’s $985-million purchase of Allbritton Communications announced last July. In the face of Wheeler's zero-tolerance policy regarding sidecars, Sinclair vowed in March to spin off the Allbritton stations in Harrisburg, Pa., Charleston, S.C., and Birmingham, Ala., to a buyer who is really, truly and absolutely not related to it and it has hired an investment banker, Moelis, to find one.

Another is Nexstar's buy of Communications Corp. of America. That $270 million deal has been pending for a year with no sign of resolution at the FCC.

“Last year was remarkable in terms of the dynamics of TV groups getting bigger,” says Mark Fratrik, BIA/Kelsey SVP and chief economist. “2012 was a good year for political advertising on TV. While interest rates were higher than they were in the downturn, they still are at what I’ll call historical lows.

“And the whole retransmission consent dynamic” has been very important too, he adds. “When a larger group acquires a station, the arrangements they have with the MSOs and the satellite companies automatically kick in the newly acquired stations at a noticeably higher retransmission consent rate. So as soon large company A buys smaller company B there’s a big increase in retransmission consent, which goes right to the bottom line.”

BIA/Kelsey, an investment and research firm based in Chantilly, Va., tracks station group ownership and uses information from individual stations and markets, in addition to historical data, to generate its station and market ad revenue estimates. It checks its estimates against whatever public information is available, Fratrik says.


Comments (13) -

HopeUMakeit Nickname posted over 2 years ago
lets rank these mergers by how many people got laid off and how conpensation increased for the corporate shirts who dont produce new stories or do not sell ads.
Insider Nickname posted over 2 years ago
So you and the other comments of this ilk are for Socialism instead of Capitalism on which this Country was built. Good to know.
JamesV Nickname posted over 2 years ago
In what way does HopeUMakeit's comment suggest he/she is for Socialism? It's a fact of life that most mergers such as those discussed in the article result in employee layoffs, increased debt, and rarely any improvement in consumer/customer service. Given the Capitalism supposedly relies on effective competition to achieve its benefits, why do you believe that those opposed to such mergers are socialists or for socialism? Those who really believe in capitalism should want to see effective competition among many players, not reduced competition and fewer people working.
Insider Nickname posted over 2 years ago
To any reasonable person, they would only need to reread the post "lets rank these mergers by how many people got laid off and how conpensation (sic) increased for the the corporate shirts who dont produce new (sic) stories or do not sell ads." If you are unable to realize that post is anti-capitalism and pro-socialist, then I really cannot help you.
SalesGrrl Nickname posted over 2 years ago
The only founding principles this country had were Deism and that this was a Representative Republic. Socialism and Capitalism are byproducts of a later era, and those ideals were not part of our country's founding. And Socialism, I might add, would oppose mergers and individual ownership of something so important as our public airwaves, and would favor government control, which is not what HopeUMakeit is advocating. Also, true Capitalism would disapprove of the mergers, as the creation of huge media conglomerates would decrease the competition between stations. So really, there is nothing in your comment that is correct, other than your usage of ilk, which is laudable.
Insider Nickname posted over 2 years ago
Your post is so full of flaws in its attempt to twist something around to try and make points it would take a JC 5000 word post to address it all, which I am not inclined to do. 1) The Country's founders believed in a higher being, but one that did not care about us. 2) I never stated that the Country was founded on Capitalism v Socialism. 3) HopeUMakeIt's entire post is based on mergers should be looked at on the effect they have on people's jobs (which as the base principal of the Founding Fathers that "the higher being" did not care about us, and thus goes against that basic concept you seem to be trying to weave into this). 4) The Public Airwaves are the Public Airwaves, despite your assertion of the opposite. The Company pays for the license, which can be revoked, as we have seen in the past. 5) To say that Capitalism would disapprove of mergers is fiction. Monopolies yes, Mergers no. 6) As thus, your entire post is nothing but a group of assorted facts which does nothing to build a case to the point HopeUMakeIt and yourself are trying to establish.
HopeUMakeit Nickname posted a year ago
American History is not your strong point. You expose your shortfall with your capitalism comment.
SCOTT GILBERT posted over 2 years ago
It's what I call Clear Channeling... Buy everything you can and amass a huge amount of debt. Then reduce "synergies" until there's hardly anyone left and quality of the product falls, while telling everyone it's all getting better and better. Then continually kick the can of debt down the road...
boisemedia2 Nickname posted over 2 years ago
Betasso is no longer with Gannett.
CEOBOY711 Nickname posted over 2 years ago
nothing to add to the first two brilliant comments. they are right on the money.
tvspy Nickname posted over 2 years ago
It takes "two to tango". The sellers are unable to continue to run their companies at a profit margin suitable to longterm health. Unfortunately, as in any merger, the areas of duplication that get cut. Peopless Master Control, robotic cameras, and centralized/regional hubbing of traffic/accounting, and MMJ's versus photog's are the reasons people are loosing jobs. Mergers simply speed up the process that would have inevitable happened in the longrun...or why would they be selling?
HopeUMakeit Nickname posted a year ago
"these sellers are unable to run their companies at a profit margin suitable to longterm health" !! what a fricking joke. !! and I know. I am a employee of one of the above referenced companies and we print money like the mint. Your "tango" had nothing whatsoever t do with logic or leverage or clout. It was only about money going to a small group of people who were alredy rich.
JamesV Nickname posted over 2 years ago
Why would they be selling? For the financial benefit that can accrue to shareholders and executives. Simple as that. How much money were the merger entities losing at the time of their mergers? It's a matter of either increasing the value of equity held, cashing out on equity held, increasing the longer term value of equity held, or possibly increasing profit margins. It's all about benefiting those at the top, regardless of the impact on employees, consumers or the public interest.
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Overnights, adults 18-49 for September 25, 2016
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