Sinclair Buys Four Cox TVs For Nearly $100M

Sinclair Broadcast Group on Monday said it is buying four TV stations in four markets from Cox Media Group for $99 million, less $4.3 million of working capital adjustments. As part of the deal, Sinclair is talking over Cox’s duopoly partnership in one market.

Sinclair said it expects to finance the purchase, less $5 million in deposits, through a bank loan or by accessing the capital markets. It also said it expects the deal, which is subject to FCC approval, to close in the second quarter.

The four stations Sinclair is buying.

• KFOX (Fox) El Paso, Texas DMA 91

• WJAC (NBC) Johnstown-Altoona, Pa. DMA 102

• KRXI (Fox) Reno, Nev. DMA 108

• WTOV (NBC) Wheeling, W.Va.-Steubenville, Ohio DMA 158

Since FCC rules prohibit ownership of two stations in markets as small as Reno, Sinclair will follow Cox’s lead and operate MNT affiliate KAME Reno under contract with a third-party licensee, Deerfield Media.

Cox announced last summer that it wanted to sell the four stations to “focus on larger markets, cross-media collaboration and heightened impact in fewer markets.” That announcement came after it had purchased duopolies in larger markets — Jacksonville, Fla., and Tulsa, Okla. — from Newport Television.

“Over the past 18 months, we have led the industry’s consolidation efforts in the mid-sized markets, purchasing 30 TV stations and creating over $400 million of equity value,” said David Smith, president-CEO of Sinclair. “We believe there are many more opportunities to acquire quality assets and to unlock hidden value, including in the smaller markets, such as where the CMG stations operate. We believe our platform size and leadership position allow us to bring meaningful purchasing power and negotiating leverage to these stations. Including synergies, we believe the CMG stations can generate approximately $20 million of cash flow, on average.”

Smith continued, “We have prided ourselves on being a forward-looking company with a history of creating innovative ways to unlock value for our shareholders. We have established Chesapeake TV as the primary operating entity for the Cox stations and other small market stations we may acquire, while STG will continue to be our primary operating entity for mid-sized market stations. We believe a dual operating structure is critical to the success of a small market strategy since the economics and competitive nature can differ from those of the mid-sized markets.”