Interest by Wilkes-Barre, Pa., investors in local TV stations led it to acquire the entire Pegasus group in a bankrutcy auction. The new owners say they are in the hunt for more mid-sized stations.
An investment group based in Wilkes-Barre, Pa., became interested in the Pegasus TV station group because its flagship stations were nearby.
But the investors, led by the Parente family, ultimately decided to buy the group from bankruptcy trustees for $55.5 million earlier this month because they saw a sound investment.
“We were impressed with the group’s management team and were convinced the stations have a lot of upside potential,” says Charles Parente, family patriarch and chairman of CP Media, the company formed to acquire the group.
Pegasus is hard to miss in the Wilkes-Barre-Scranton market, the 55th largest DMA. It owns WOLF (Fox) and WILF (WB/MNT) and operates WSWB (WB/CW).
The group’s other full-service stations include WPXT (WB/CW) and WPME (MNT) Portland-Auburn, Maine; WDSI Chattanooga, Tenn. (Fox); WTLH Tallahassee, Fla.-Thomasville, Ga., (Fox); and WGLF Gainesville, Fla. (CBS).
The group also holds the CW affiliation in Chattanooga and Tallahassee-Thomasville and will use digital channels to broadcast the programming. It also has a Class A low-power station in Gainsville, WMYG, which it will use to broadcast MNT.
CP Media made an 11th-hour play for the stations, agreeing to purchase them in a bankruptcy auction earlier this month thought to be a formality for Silver Point Capital, which had negotiated a deal with the trust established to sell the stations in 2005.
But CP Media’s bid was several million more than the Silver Point group had agreed to pay.
The deal came as a pleasant surprise to Michael Yanuzzi, the one-time Wilkes-Barre-Scranton GM who has managed the entire group since bankruptcy proceedings began 18 months ago.
“We were glad to see that local investors were high on the properties and what we can achieve with them in the future,” says Yanuzzi. “The bankruptcy had tied our hands in terms of planning and program acquisition, and this will really help us moving forward.”
The Parente family—Charles and sons John and Brian—has diverse holdings, including coal mining. Pegasus is its first run at broadcast TV, but it knows radio. It has a controlling interest in Bicoastal Media, based in Tiburon, Calif., which operates 29 radio stations in California, Oregon and Washington. In the past, it has also had interests in telephony and cable.
The other principal in CP Media is Frank Henry, another Wilkes-Barre businessman.
The Pegasus stations went into play when the broadcast group’s parent company filed for bankruptcy after a four-year legal battle with News Corp. over the sale of its satellite business, then the largest independent reseller of DirecTV subscriptions in the United States with a presence in 42 states.
One judgment forced Pegasus to pay $75 million to News Corp., according Yanuzzi. That forced the sale of the stations.
“The stations themselves had nothing to do with the bankruptcy,” says Yanuzzi. “The broadcast division has run cash flow positive for several years.”
Yanuzzi, who will remain in charge of the station group with John Parente overseeing things from the investment group side, says he plans to increase revenue by developing local advertiser-supported programs at one station and spreading them across the group.
For instance, Chattanooga Butterfly, a local take on Extreme Makeover, which gets local dentists and surgeons to participate in a season-long makeover of a contestant, is being taken to WOLF in Wilkes-Barre-Scranton this season.
Yanuzzi also plans to build more community-based Web sites. NEPA.com (that stands for North East Pennsylvania) and OurMaine.com have become successful community portals in Wilkes-Barre-Scranton and Portland, Maine, respectively.
Meanwhile, says John Parente, CP Media is looking to expand the group by acquiring more stations in mid-size markets.