The group owned by Providence Equity has deals with Nexstar for 12 stations, Sinclair for six and Cox for four. It’s still looking for buyers for its remaining five stations.
Confirming a Wall Street Journal story yesterday, Newport Television today announced that it is selling 22 of its 27 full-power stations to three buyers — Nexstar Broadcasting Group, Sinclair Broadcast Group Inc. and Cox Media Group — for a total of approximately $1 billion.
Providence Equity Partners, the private equity firm that owns Newport, announced last March it was looking to unload the station group. It bought the stations from Clear Channel Communications in 2007 for just over $1.1 billion.
According to Newport, the $1 billion it is getting from the sales represents 10.5 times trailing 12 months broadcast cash flow of the stations. It expects all the deals to close by the end of the year.
Nexstar Broadcasting is picking up 12 stations in eight markets for $285.5 million:
- Salt Lake City (DMA 33) — KTVX (ABC) and KUCW (CW)
- Memphis (DMA 49) — WPTY (ABC) & WLMT (CW)
- Little Rock, Ark. (DMA 56) — KLRT (Fox) and KASN (CW)
- Syracuse, N.Y. (DMA 84) — WSYR (ABC)
- Binghamton, N.Y. (DMA 157) — WBGH (NBC) and WIVT (ABC)
- Elmira, N.Y. (DMA 174) — WETM (NBC)
- Jackson, Tenn. (DMA 176) — WJKT (Fox)
- Watertown, N.Y. (DMA 177) — WWTI (ABC)
The Little Rock stations are actually being acquired by Mission Broadcasting, a company that Nexstar set up and backs financially to own second stations in markets where it cannot directly own them because of the FCC’s local ownership limits.
Nexstar’s deal also includes Newport’s Inergize Digital Media, a provider of online and mobile platforms for broadcasters and other local media companies.
Sinclair Broadcast is getting six stations in five markets for $412.5 million:
- Cincinnati (DMA 35) — WKRC (CBS)
- San Antonio, Texas (DMA 36) — WOAI (NBC)
- Harrisburg-Lancaster (DMA 41) — WHP (CBS)
- Mobile, Ala.-Pensacola, Fla. (DMA 60) — WPMI (NBC) and WJTC (Ind.)
- Wichita, Kan. (DMA 67) — KSAS (Fox)
Sinclair is also acquiring Newport’s rights to operate third-party duopoly stations in Harrisburg, Pa. (CW affiliate WLYH), and Wichita, Kan. (MNT affiliate KMTW). Those rights include options to buy the stations.
Cox comes out with four stations in two markets for an undisclosed price:
- Jacksonville, Fla. (DMA 50) — WAWS (Fox) and WTEV (CBS)
- Tulsa, Okla. (DMA 59) — KOKI (Fox) and KMYT (MNT)
Cox Media Group spokesman Andy McDill confirmed the deal, but declined to say how much Cox had agreed to pay for the stations. He noted, however, that Cox operates radio stations in both markets. “The deal works well with our cross-media collaboration efforts.”
If Newport is, indeed, getting around $1 billion for the 22 stations, arithmetic says that Cox is paying around $300 million for its four stations.
Newport says it is continuing to look for buyers for its five remaining stations:
- Bakersfield, Calif. (DMA 126) — KGET (NBC)
- Fresno, Calif. (DMA 55) — KGPE (CBS)
- Rochester, N.Y. (DMA 79) — WHAM (ABC)
- Albany, N.Y. (DMA 58) — WXXA (Fox)
- Eugene, Ore. (DMA 121) — KMTR (NBC)
“Nexstar, Sinclair, and Cox are well-suited to foster continued success at each of [the Newport] stations,” said Newport CEO Sandy DiPasquale in a statement. “We and our partners at Providence appreciate the hard work and dedication of all the employees at our television stations. We are in discussions with potential buyers of our remaining stations and are confident we will find the right new owner for each of them.”
Al Dobron, a managing director at Providence Equity, praised DiPasquale for his job in running the stations. “We are pleased with the value that we have added together and expect these stations to continue their success in the years ahead.”
Moelis & Company is acting as Newport’s exclusive financial advisor. Weil, Gotshal and Manges is acting as its legal adviser, and Covington & Burling is acting as its regulatory counsel on the transactions.
Nexstar CEO Perry Sook said the Newport stations are “an ideal complement to our existing station portfolio in terms of geographic fit, market size and duopoly presence.”
From its buyer’s perspective, which takes into account operating improvements and certain synergies, he said, Nexstar is paying approximately 5.5 times the stations’ average 2011-12 pro-forma projected cash flow and approximately 5.0 times their 2012 pro-forma projected cash flow.
With the deal, the portfolio of stations that Nexstar owns, operates, programs or to which it provides sales and other services expands to 67 stations in 40 markets reaching approximately 11.4% of all U.S. TV homes.
Inergize, which provides online and mobile solutions for approximately 75 stations, will be integrated Nexstar’s existing e-Media and GoLocal.biz platforms, the company said.
On a conference call, Sook declined to provide financial details about Inergize, saying only that it would be a “seven-digit contributor” to EBITDA and net revenue.
To finance the deal, Nexstar said it has secured commitments for $645 million in new debt comprising a $570 million Term Loan B due 2019 and a $75 million Revolving Credit Facility due December 2017. Some of the money will be used to refinance existing debt, it said.
Sinclair said it expects to finance the deal with “cash on hand along with a bank loan and/or by accessing the capital markets.”
“In the past year, we have announced the acquisition of 23 television stations, representing the addition of almost $1 billion in assets,” said CEO David Smith in a statement. “The Newport stations acquisition is consistent with our focus of adding “big four” affiliates in mid-sized markets and strengthening our in-market positions.
Wells Fargo securities analyst Marci Ryvicker, in a note to clients, said she anticipates that Sinclair’s buyer’s multiple will be between 6X and 6.5X.
While Sinclair was buying, it was also selling.
It said it would spin off its CW affiliate in San Antonio (KMYS) and its MNT affiliate in Cincinnati (WSTR) to Deerfield Media Inc., presumably to comply with the FCC ownership limits. In the deal, Deerfield also picks up an option to buy two of the stations it is acquiring from Newport, WPMI-WJTC Mobile, Ala.-Pensacola, Fla.
Sinclair said it intends to “provide sales and other non-programming services to each of these four stations pursuant to shared services and joint sales agreements.”
In yet another deal, Sinclair said it is buying WTTA Tampa-St. Petersburg from Bay Television Inc. for $40 million. Since 1998, Sinclair has operated WTTA pursuant to a local marketing agreement.