Gray Completes Hoak-Prime Station Buy
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.
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.
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.