DMAS 184, 196 & 197

Gray Buying Yellowstone Stations

The $23 million deal gives it KGNS, Laredo, Texas; KGWN and KCWY Cheyenne, Wyo.-Scottsbluff, Neb.; KCWY Casper, Wyo.; and some LPTVs and translators.

Gray Television today announced that it is purchasing Yellowstone Television LLC, which comprises:

  • KGNS Laredo, Texas (DMA 184).  Its channels are affiliated with NBC, CW and Telemundo.
  • KGWN Cheyenne, Wyo.-Scottsbluff, Neb. (DMA 196).  Its channels are affiliated with CBS and CW.  KGWN extends throughout the market via KSTF Scottsbluff, Neb., and K19FX  Laramie, Wyo.
  • KCHY-LP Cheyenne-Scottsbluff (NBC).  It will now integrate its operations with KGWN.
  • KCWY Casper, Wyo. (DMA 197).  Its primary channel is affiliated with NBC.

Gray purchased a 99% non-voting interest in Yellowstone for $23 million and began operating the Yellowstone stations pursuant to a local marketing agreement. Subject to receipt of regulatory and other approvals, Gray will acquire voting control of Yellowstone in a subsequent transaction that is expected to close in the fourth quarter of 2013 or the first quarter of 2014. Additional terms were not disclosed.

The transaction purchase price represents a multiple of 6.2 times a blended average of 2013-2014 pro forma broadcast cash flow of the stations.  The transaction will be immediately accretive to Gray, the company said. 

According to BIA revenue data,  KGNS, KGWN and KCWY are each the highest ranked television station in their markets.

Wells Fargo Senior Analyst Marci Ryvicker was bullish on the news. “Although not a significant transaction in size, we do think Yellowstone fits in with [Gray]’s M&A criteria and is a start to the company’s roll-up strategy. KGNS-TV, KGWN-TV and KCWY-TV are the highest ranking television stations in their respective markets, according to BIA revenue data, ensuring a good ”fit” with [Gray]’s M&A criteria.

Jason Wolff, the president of Yellowstone, said: “This group of stations is distinguished by their demonstrated market success and commitment to their local communities.  While selling the group was a difficult decision, Gray Television will provide these stations and their fine employees with tremendous opportunities to build upon their successes.”

BRAND CONNECTIONS

“Gray is thrilled to have the opportunity to expand into three new, dynamic markets through the acquisition of Yellowstone’s terrific television stations,” said Hilton Howell, Gray’s CEO and president.  “We look forward to working with the strong teams in each of these markets to enhance their leading local positions even further,” he added.

Kevin Latek, Gray’s SVP for business affairs, said: “Gray’s acquisition of Yellowstone will add three more No. 1 stations to what we believe is already the largest collection of top television stations in the industry.  As such, the transaction is consistent with Gray’s strategy of enhancing shareholder value through select acquisitions of market-leading stations that share the culture and values of our existing television stations.”

Gray funded last week’s acquisition of KJCT Grand Junction Colo., and the acquisition of the Yellowstone non-voting interest from existing cash on hand.


Comments (4)

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Joanne McDonald says:

November 4, 2013 at 3:29 pm

Gray Television can buy KGWC/KGWL/KGWR CBS from Mark Nalbone and be housed in KCWY studios in Casper airing KCWY NBC on their DT1 and KGWC CBS from KGWN CBS on their DT2 with KGWN/KSTF CBS in Cheyenne and Scottsbluff from the KGWN building in Cheyenne carrying KGWN/KSTF CBS on their DT1 and KCHY NBC from KCWY NBC on their DT2. KCWY current DTV RF channel 12 can go to KPTW to use for their DTV RF channel. KGWC can use channel 13 for their virtual channel while continuing to use channel 14 for their RF channel. KGWC could move into KCWY studios with CBS, NBC, and CW with KTWO and KFNB remaining at their current location with ABC and FOX. I wouldn’t mind Gray buying KGWC/KGWL/KGWR CBS for Excalibur from Mark Nalbone to stop the choke hold in the Casper market with Mark Nalbone just running ABC and FOX and Gray can have CBS, NBC, and CW in the Casper and Cheyenne-Scottsbluff TV DMAs. Gray can work for both KYMA and KSWT with or without the Excalibur company if the deal for Brian Brady to purchase the stations under the Black hawk Broadcasting license falls through.

    Joanne McDonald says:

    November 4, 2013 at 4:32 pm

    Gray previously sold KGWN/KSTF to Chelsey than it went to Sagamore Hill and lately Yellowstone Holdings and Chelsey also took over KGWC/KGWL/KGWR and lately sold it to Mark Nalbone and license under the Mark 3 Media banner to join KFNB/KFNE/KFNR in Casper and KLWY in Cheyenne under the Wyomedia banner and KTWO in Casper under the Silverton banner in a near media monopoly in Wyoming.

    Wagner Pereira says:

    November 4, 2013 at 8:22 pm

    And we can just put all call letters and owners in a big box and just draw them out together, which can also tell us what is possible ownership. Meanwhile, the people that know what they are doing continue to buy and sell, while you make up stuff on the sidelines.

Rachel Martin says:

November 6, 2013 at 12:06 pm

James…what?


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