As it proceeds with its acquisition of Tribune Media, Nextstar Media Group is selling 19 TV stations in 15 markets for a total of $1.32 billion in order to comply with FCC ownership rules.
Tegna will acquire 11 of those stations in eight markets for $740 million, while Scripps will pick up eight stations in seven markets, including WPIX New York and three other stations in top-30 markets, for $580 million. Scripps has granted Nexstar the option from March 31, 2020, through the end of 2021, to buy back WPIX.
Nexstar is still in negotiations to divest two remaining stations in Indianapolis.
“As with our prior acquisitions, we announced the Tribune transaction after developing a comprehensive regulatory compliance plan for required station divestitures and a detailed integration plan that will result in significant synergy realization,” said Perry Sook, CEO of Nexstar, in a statement. “The proposed divestitures announced today mark an important step in fulfilling Nexstar’s commitment to regulatory bodies to divest certain television stations in order to comply with the FCC local and national television ownership rules and to obtain FCC and Department of Justice approval of the proposed Nexstar-Tribune Media transaction.
Once the transactions are closed, Tegna will own 58 stations in 47 markets. The group currently covers about one-third of U.S. TV households.
“Tegna has a proven track record of acquiring highly attractive assets that create immediate value for shareholders through significant synergies,” said Dave Lougee, president and CEO of Tegna. “They add four additional key markets to our strong political footprint as the 2020 presidential election gets underway.”
For its part, Scripps will own 59 stations in 42 markets with a reach of nearly 30 percent of U.S. TV households. Scripps is adding two CBS affiliates, two Fox affiliates and four CW affiliates.
“This acquisition represents another step in our plan to improve the depth, reach and durability of our broadcast television station portfolio while adding nicely to the company’s free cash flow generation,” said Adam Symson, president and CEO of Scripps, in a statement. “These stations allow us to rebalance our portfolio with meaningful assets – at an efficient price ahead of a robust political advertising season.”
Scripps has been in expansion mode, recently acquiring ABC affiliates in Tallahassee, Fla., and Waco, Texas, from Raycom. The company also is awaiting FCC approval of its purchase of 15 TV stations in 10 markets from Cordillera Communications.
Nexstar agreed to buy Tribune in December, after the company had spent more than a year in the process of being acquired by Sinclair Broadcast Group before the FCC finally shut down the merger, on the grounds that Sinclair did not act in good faith regarding required divestitures.