Gray Completes Hoak-Prime Station Buy

To comply with the FCC's new local ownership rules, the broadcaster has shut down some stations, moving programming to subchannels, and hired the Minority Media and Telecommunications Council to find new owners for six stations it is giving up. Gray has now closed on all announced transactions, except for three stations in Montana for approximately $2  million.

Gray Television has completed its acquisition of Hoak Media and Prime Cities, shutting down some stations and combining programming on others through the use of digital subchannels to conform to the FCC's strict new ownership limit.

It has also hired the Minority Media and Telecommunications Council to find new owners for six stations it is giving up.

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When it announced the Hoak deal last November, Gray said that sidecar Excalibur Broadcasting would acquire five television stations in existing or future Gray markets from Hoak, Parker Broadcasting, and Prime Cities Broadcasting, and that Gray would operate the stations through shared services agreements. 

As a result of new FCC rules, Gray said Friday it had unwound the SSA arrangements and that Excalibur was dropping out of the deal.

Gray shut down KHAS Lincoln and transferred the NBC affiliation and all its other programming to another of its stations in the market, KSNB.

KSNB is now broadcasting NBC on its primary channel, having shifted the programming it had been airing (MNT and Me-TV) to a subchannel.

Brand Connections

The two Prime Cities Fox affiliates, KNDX-KXND Minot, N.D., also ceased broadcasting. The Fox programming will now be aired on KFYR and its satellite stations acquired from Hoak in the market.

Gray has also has assumed all of Hoak's contracts for KXJB Fargo, N.D. (CBS), and KAQY  Monroe, La. (ABC), and will provide certain services to those stations.

Along with KJCT Grand Junction, CO (ABC), Gray plans to eventually transition the programming from those stations to its digital subchannels of other stations in those markets.

In its deal with MMTC, Gray imposed three conditions:

  • MMTC will market the stations only to socially disadvantaged enterprises, such as a business controlled by a woman or a minority, and to nonprofit entities such as a Native American tribe, a religious institution or a school.

  • A potential new owner must be willing and able to acquire and operate the station on its own, without any sales, engineering, or other service arrangement with an in-market broadcaster.
  • Each station will be offered to interested parties for a price that merely reimburses Gray for its expenses associated with a particular station sale. 

"Gray appreciates the willingness of Hoak, Parker, Prime Cities and Excalibur in permitting this constructive and innovative effort to expand diversity in broadcast ownership and programming," said Kevin Latek, SVP, business affairs, Gray.

Gray has now closed on all announced transactions, except for three TV stations in Montana for approximately $2  million announced on May 7, 2014. (Gray operates two of these stations through a pre-closing local marketing agreement and sells advertising for the third station through a pre-existing joint sales agreement.) 

Including the Montana stations, Gray now owns and/or operates television stations in 42 television markets broadcasting 139 program streams including 75 affiliates of the Big Four networks (ABC, CBS, NBC and FOX). 

Gray said it also completed the refinancing of its senior credit facility, which now consists of a seven-year $525 million term loan facility and a five-year $50 million revolving credit facility. 

The proceeds from the term loan were used primarily to complete the Hoak Acquisition for approximately $306 million including working capital adjustments and to refinance $159 million outstanding under our previously existing term loan, pay transaction fees and expenses, and for other general corporate purposes.


Comments (8) -

Toby Williams Nickname posted over 2 years ago
In response to the FCC's BS:
SalesGrrl Nickname posted over 2 years ago
Yeah, pretty sure that it's not just the government's fault this has happened. There are huge companies that are writing our laws, and let's not forget the huge percentage of millionaires in our government. Everyone cries about how the NSA has our personal information, what about Google and Apple? Just because they are a non-governmental entity that makes them safer?
MobileVortex Nickname posted over 2 years ago
There's a pretty big difference between taking your information and you allowing private companies access to your data. If you don't read/understand the terms & conditions/ their privacy policy. That is the users fault not the companies.
Chuck Nickname posted over 2 years ago
Another loss for antenna viewers as fewer channels are on the air. The FCC should be happy. While some of this programming may go to sub-channels the quality will not be the same. The .1 channels have the best HDTV and the sub-channels have an inferior picture. If MeTV and AntennaTV are on the second channels that doesn't matter much. But to put two major networks on the same channels (FOX, ABC, etc.) it does matter. Just a preview of what repacking will do.
Insider Nickname posted over 2 years ago
You really do not get how it works. Putting anything on a second channel, including MeTV and AntennaTV impacts the main channel, even with the best statmux.
Chuck Nickname posted over 2 years ago
Yes, I do get it. I had it explained by a broadcast engineer who said the difference could be measured with instruments. However, he said the difference on the first channel normally used for HDTV was minimal. But the more channels added the more it could be measured. We have two local CBS stations--one airs only one program the other two. Both read out 1080i on the first channel. I can't tell the difference when they air the same program but I know it is there. The second channel on one carries MeTV which are older programs not produced in HD. Some are even black and white which the engineer said do not require as much space. When the FCC does the auction and some stations are repacked viewers will be impacted and the signal will look more like cable. Since I am not an insider I do not know what a statmux is. And then I probably don't need to know.
boisemedia2 Nickname posted over 2 years ago
You're not an insider, Chuck... But you're also not a jerk. So you win this thread!
Insider Nickname posted over 2 years ago
May win the thread (for ignorance), but loses the war for PQ.
Marketshare Blog Playout Blog




Overnights, adults 18-49 for September 29, 2016
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Source: Nielsen


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