I think that's what the problem is, in terms of finding qualified buyers. Because you may recall the deal they made with Citadel when they sold the radio stations. It ended up with Disney stockholders getting Citadel stock that ended up being worthless in a couple years. They don't want to go through that again.
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Analysis: could Disney spin off ESPN and ABC?
- Thread starter Ccook55
- Start date
I think that's what the problem is, in terms of finding qualified buyers. Because you may recall the deal they made with Citadel when they sold the radio stations. It ended up with Disney stockholders getting Citadel stock that ended up being worthless in a couple years. They don't want to go through that again.
Here in Houston I could see Nexstar going after KTRK if Disney puts their O&Os on the block. KTRK already produces newscasts for Nexstar‘s KIAH, so a duopoly might be the next logical step.
Nexstar's got a lot of problems, and being at the 39% market cap (goosed big-time by the "UHF Discount") is the biggest one of all.
Gray, Sinclair, Scripps... none of them can afford the ABC O&Os. Tegna and Apollo-controlled Cox don't even want to exist. There's literally no buyers out there, and the cooling economy plus high interest rates make such purchases even more impossible to do.
The M&A mania in television ownership is over, and if Disney wanted to cash out, they missed the boat.
It’s less about any of that and more about the DOJ literally sitting on their hands and refusing to issue any evaluations on the deal. They’d be the ones to state if market revenue is too concentrated in any given market and order any divestitures, not the FCC per se.
Usually the DOJ would make a statement right after the merger or buyout is announced, or after a few weeks, but nothing for nearly a year. The radio silence on their end is deafening.
Sure, Tegna could ask for a three-month extension—it’d beat SG having to pay them $500K a day, per Axios—but if the DOJ continues to sit on this, there’s nothing for the FCC to approve or reject, regardless if they have four or five commissioners.
I suspect the deal window will be extended. The top Tegna executives who were going to use their buyout payments to sail into retirement don’t want to have to stay on the job if the deal collapses.🤑
Still think divestitures might be required in markets where Apollo has conflicts between Cox Media Group and Tegna. I don’t buy Standard General’s argument that “Apollo has no voting power” regarding acquired Tegna stations. Voting power or not, Apollo can still put the arm on SG to influence decision making, so it has effective control over both companies.
The phrase "good luck with that" comes to mind. Not that anything is truly impossible in time and with enough pieces nudged into place, but "if" is a very big "if" as the landscape looks in the near-term.
Soo Kim blatantly made this buyout attempt because he openly despises Dave Lougee, repeatedly going after him in the press and trade papers. Of course he couldn’t afford Tegna on his own, so Apollo is providing a good deal of the financing and is making him look like little more than a puppet. That in turn gives Apollo control of four stations in Jacksonville, three in Atlanta and three in Seattle.I suspect the deal window will be extended. The top Tegna executives who were going to use their buyout payments to sail into retirement don’t want to have to stay on the job if the deal collapses.🤑
How is that in the public interest?
Sinclair’s attempt at buying Tribune Media wasn’t even that flagerant and they had numerous markets where they had potentially too much revenue. Sinclair did the wrong thing, dug in their heels and refused to divest stations… until it was too late. Likewise, Apollo and SG refuse to acknowledge this concentration of ownership by one private equity firm is a bad thing, and it’s playing out like you’d expect, with the DOJ and FCC keeping eerily quiet.
Again, that’s on the DOJ, and they’re not doing anything. They’ve been silent for a year with no indication they’ll announce any divestments or will even come close to approving it.
The FCC and DOJ have received the objections from Graham Media Group and trade unions which openly view this as Apollo taking over Tegna alongside Cox and running both into the ground via major downsizing efforts and cost cutting which will cripple the industry. (And I haven’t even gotten into the incredibly shady sidecar deals Apollo orchestrated between Tegna and Cox regarding WFXT, KHOU and WFAA as part of this buyout that is slimy in an indescribable manner.)
To be very blunt, the deal isn’t dead, but for all intents and purposes, it has an imperceptible chance of going through. I consider it dead regardless of when it actually dies.
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As an aside, I’m amazed that Graham Media Group hasn’t itself been gobbled up by a bigger player. Having only a few stations would seem to make it an easy target.
It's still family controlled, fairly diversified and in good shape financially. Same with Hearst (which btw has a minority stake in ESPN). They have no reason to sell to anyone.
No buyers would exist for a Graham, anyway.
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