The deal for what will be a CW affiliate creates a duopoly in the 20th largest television market for the station group. It already owns WESH, the NBC affiliate in the market.
Hearst-Argyle Television is buying WKCF Orlando, Fla., from Emmis Communications for $217.5 million in cash, subject to FCC and other regulatory approvals, the company announced this morning.
Hearst-Argyle already owns Orlando’s NBC-affiliate WESH-TV, so the acquisition of WKCF will add a television duopoly in the nation’s 20th largest television market. WKCF is affiliated with The WB Network and will become a CW affiliate when that new network launches in September. With this acquisition, Hearst-Argyle will have duopolies in five of its seven largest markets: Boston; Sacramento, Calif.; Kansas City, Mo.; Orlando and Baltimore, where the company has a radio/television combination.
“The acquisition of WKCF and the creation of a duopoly with WESH is an exciting and highly strategic opportunity for our company. WKCF is one of the strongest WB affiliates in the country and we expect it will thrive as a new CW affiliate under our ownership,” said David Barrett, Hearst-Argyle president and CEO, in a prepared statement.
“The opportunity to advance each station’s commitment to localism and to make WESH’s extensive news resources available to WKCF will benefit the Orlando community and be especially valuable to our advertisers,” Barrett said. “WKCF’s impressive sales team will be an excellent fit with WESH, and our local and national advertising customers will be very well served by a powerful combined sales organization. We intend to operate both stations at our current WESH facility, which will enable opportunities to combine news, marketing, sales, engineering and administrative resources in a highly efficient manner, while also creating new programming and promotional initiatives for our viewers.
“The economics of this transaction are attractive, especially considering the significant tax benefits associated with an asset acquisition and the operating cost efficiencies that will result from a combined duopoly structure,” Barrett said. “We believe this transaction will be slightly accretive to EPS and Free Cash Flow upon closing. We expect to fund the transaction with cash on hand and an advance under our unused $250 million credit facility, resulting in minimal impact on our leverage ratios.”
Subject to FCC and other regulatory approvals, the transaction is expected to close this fall.