Meredith Bullish On Buying Stations

Count Meredith Corp. in when it comes to buying TV stations.

Stephen Lacy, chairman-CEO of the company, said adding to Meredith’s station portfolio will be one of four key initiatives in the coming year.

Along with growing existing businesses organically, continuing consolidation in the company’s magazine and digital portfolio and closing on station acquisitions announced late last year, Meredith intends to “continue to grow its television footprint,” Lacy said during Wednesday’s second-quarter earnings conference call with analysts and investors.

Late last year, Meredith announced plans to buy KTVK, an independent in Phoenix (DMA 12); KASW, the CW affiliate in Phoenix; and KMOV, the CBS affiliate in St. Louis (DMA 21) from Gannett and Sander Media for $407.5 million in cash.

Lacy’s comment prompted Gabelli & Co. analyst Barry Lucas to question whether Meredith would proceed with acquisitions before the U.S. Supreme Court delivers a ruling on Aereo.

Lacy answered quickly and unequivocally: “Yes, we would.”

One of the perceived threats from Aereo is to broadcasters’ retransmission revenue model. Broadcasters contend that Aereo, which uses a set-top device to redistribute over-the-air broadcast signals to paying subscribers violates copyright protections.

Thus, if Aereo can get away with redistributing broadcasters’ copyright-protected signal without compensating them for it, as cable and satellite companies must, it threatens to erode that important second stream of revenue.

Paul Karpowicz, head of Meredith’s Local Media Group, which encompasses its television stations, acknowledged that’s the core issue in broadcasters’ resistance to Aereo.  “You have to look at Aereo not so much as technical problem or consideration,” Karpowicz said, noting that Aereo’s introduction in Atlanta (DMA 9), “had negligible impact” on Meredith’s CBS affiliate WGCL.

“What’s important is that we frame the issue as it goes before the Supreme Court as copyright protection,” he said. “We’re happy this is going to the Supreme Court. They can answer questions regarding copyright protections. The threat is not so much Aereo and some funky technology, the threat is to copyright protection.”

Karpowicz made it clear that even in the event of a Supreme Court ruling in Aereo’s favor, broadcasters will continue to fight to protect those copyrights.

“If the Supreme Court does not rule in favor of broadcasters, the issue would be taken to Congress and addressed there,” Karpowicz vowed.

Meanwhile, look for Meredith to keep its M&A momentum going.