DMA 107

Sinclair Buys KRNV Reno For Triple Play

Sinclair Broadcast Group announced that it closed on the acquisition of the non-license assets of NBC affiliate KRNV Reno, Nev. (DMA 107), from Intermountain West for $26 million, giving it a triopoly in the market. It already owns the Fox affiliate and operates the MNT outlet.

Sinclair Broadcast Group will soon be operating a third station in Reno, Nev.

The station announced Friday that it had acquired the non-license assets of NBC affiliate KRNV Reno, Nev., from Intermountain West for $26 million and entered into an agreement “to operate or provide sales services to the station.”

Because the license was not included, the deal does not require FCC approval. Sinclair has already closed on the deal.

However, according to one station valuation expert, in deals in which assets are split from the license, the FCC likes to see 20% of the total valuation allocated to the license. That suggests the station is worth around $32 million.

In Reno, Sinclair also owns KRXI, the Fox affiliate, and operates KAME, an MNT outlet, under a local marketing agreement.

The price represents a 5.2x multiple of the average 2012-2013 cash flow including synergies, Sinclair said. “We expect to drop our San Francisco news share on our Fox station and replace it with a local Reno newscast.”

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Marci Ryvicker, a securities analyst for Wells Fargo, said the deals will add about $5 million a year to Sinclair’s EBITDA and $3 million a year to it free cash flow.

“[I]t is evidence that SBGI can continue to make accretive acquisitions through station tuck-ins, and…the very attractive buyer’s multiple, leading us to believe that deals can continue to be done at highly accretive levels.”

Kalil & Co. represented Intermountain in the transaction.


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