Scripps Buying 15 Cordillera Stations For $521M

[Y2kTheNewOldies]

https://tvnewscheck.com/article/top-news/224512/scripps-buying-15-cordillera-stations-521m/

Note KVOA-TV Tucson goes to Quincy Media

The E.W. Scripps Co. is acquiring 15 full- and low-power stations in 10 markets from Cordillera Communications, furthering what Scripps calls its “strategies to increase the durability and improve the operating performance” of its broadcast portfolio.

The purchase price is $521 million. That reflects a 7.2 buyer’s multiple (with tax benefits and $8 million a year in synergistic savings) and a 9.5% seller’s multiple (without the tax benefits and savings).


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“Today, we increase our cash, improve out margins and grow our national footprint — all in one transaction,” said CEO Adam Symson in a call with analysts this morning following the deal’s announcement.

And he said that Scripps may not be done buying. In fact, he said, Scripps would “aggressively pursue” other big deals, even though Cordillera and other recent acquisitions will swell its debt leverage to 5.8.

 

[Y2kTheNewOldies]

Here are the List of Stations affected by the deal

The stations Scripps is acquiring:

WLEX, the NBC affiliate in Lexington, Ky.
KOAA, the NBC affiliate in Colorado Springs, Colo.
KATC, the ABC affiliate in Lafayette, La.
KSBY, the NBC affiliate in Santa Barbara-San Luis Obispo, Calif.
KRIS, the NBC affiliate, and KAJA, a Telemundo affiliate, in Corpus Christi, Tex.
KPAX and KAJJ, a CBS affiliate in Missoula, Mont.
KTVQ, a CBS affiliate in Billings, Mont.
KXLF-KBZK, the CBS affiliate in Butte-Bozeman, Mont.
KRTV, the CBS affiliate, and KTGF, the NBC affiliate, in Great Falls, Mont.
KTVH, the NBC affiliate, and KXLH, the CBS affiliate, in Helena, Mont.
Scripps emphasized what it called the resulting “stronger Scripps portfolio:

Scripps will have the No. 1 Nielsen-rated TV stations in 11 of its 36 markets.
The Cordillera stations will significantly diversify the Scripps portfolio. The 51 stations will include 18 ABC affiliates, 11 NBC affiliates, seven CBS affiliates and two Fox affiliates.
Scripps will operate seven duopolies, efficiently enhancing the depth and durability of the portfolio

 

[Y2kTheNewOldies]

http://scripps.com/press-releases/1...-in-10-markets-from-cordillera-communications

Here is the official statement by Scripps

CINCINNATI – The E.W. Scripps Company (NASDAQ: SSP) is acquiring 15 television stations in 10 markets from Cordillera Communications, furthering the company’s strategies to increase the durability and improve the operating performance of its broadcast portfolio.

The acquisition grows the Scripps local television station footprint to 51 stations in 36 markets with a reach of nearly 21 percent of U.S. TV households.

In addition to the increased reach, the acquisition adds to Scripps’ market leadership, with all but one of the acquired stations ranking as No.1 in their markets. It also adds depth to its local media footprint through the addition of three duopolies – in Helena and Great Falls, Montana, and Corpus Christi, Texas.

The stations also diversify Scripps’ affiliate relationships, adding more NBC and CBS stations to Scripps’ strong ABC roster.

Financial highlights include:
• The purchase price is $521 million.
• The portfolio is immediately accretive to margins for the Local Media segment and the company.
• Based on Cordillera’s blended 2017 actual and 2018 estimated revenues of $158 million and EBITDA of $63 million, adjusted for synergies, the purchase price multiple is 7.2x net of tax benefits.

The Cordillera stations have strong local brands and are well run and nicely positioned in their markets, said Brian Lawlor, president of Local Media.

“Through this transaction, Scripps will operate the No. 1-rated TV stations in a third of its markets, enhancing the durability of our portfolio,” Lawlor said. “The acquisition also allows us to go deeper in new markets with the addition of three new duopolies, including two with Big Four combinations.”

 

[PTBoardOp94]

This acquisition doesn't make any sense to me. It seems like Scripps wants to diversity away from ABC, and expand its stable of duopolies, both which are good goals.

But this deal doesn't seem to advance those goals in any meaningful way. The stations being purchased are in markets ranked: #63, #88, #120, #124, #128, #164, #166, #192, and #205. The previous smallest market owned by Scripps, was Bakersfield #126. If ABC fails as a network, and causes revenue to fall at KMGH in Denver and WRTV in Indianapolis, what good will it be having a strong NBC affiliate in Great Falls or Corpus Christi, where local advertising is a fraction of the numbers seen in top-20 markets?

 

[TheBigA]

This acquisition doesn't make any sense to me.

I agree, unless someone has a ranch in Montana. Because they now have that state covered!

 

[gr8oldies]

Doesn't seem to be any strategic advantage in a random collection of medium markets. You'd have thought they'd have learned that with radio.

 

[TheBigA]

Doesn't seem to be any strategic advantage in a random collection of medium markets. You'd have thought they'd have learned that with radio.

Reading the press release it sounds like being #1 in a market is more important than the size or the revenue potential of the market.

 

[nomadcowatbk]

Doesn't seem to be any strategic advantage in a random collection of medium markets. You'd have thought they'd have learned that with radio.

they aren't even in battleground states either

 

[umfan]

It's what was available at a price Scripps could afford. i think the company is under enormous pressure to improve results by Wall Street. An acquisition like this would allow some fancy accounting to massage results for the near term and management likely hopes their restructuring (read cost cuts) at their existing stations takes hold in the meantime. They may also be looking at trying to centralize some of the news operations. This is about nothing but adding aggregate stations and revenue. Nothing strategic about it.

 

[ShawnHill1]

Especially here in the West, Scripps has a large roster of ABC affiliates--Denver, San Diego, Bakersfield, Boise, Phoenix, Tucson, and Las Vegas. When you add the ABC O&Os in Los Angeles, San Francisco, and Fresno, the aforementioned Scripps ABC stations, and the News-Press & Gazette Company (KEYT Santa Barbara, KESQ Palm Springs, KECY-DT2 Yuma/El Centro, and KRDO Colorado Springs), they control most of the ABC network access on this side of the country--even more pronounced here in California, and in the desert Southwest. From San Francisco on south, and east to Phoenix (except for Monterey-Salinas [KSBW-DT2, owned by Hearst]), the ABC station is either owned by the network itself, Scripps, or NP&G.

Gray (most of Oregon outside of Portland), Morgan Murphy Media (most of Washington state outside of Seattle), Tegna (Sacramento), Hearst (Monterey/Salinas and Albuquerque) and Sinclair (Portland and Seattle) operate most of the other western ABC-affiliated stations.

 

[upstate29651]

Seems that Scripps could have more wisely used their money and picked up some Cox stations....

G

 

[Y2kTheNewOldies]

https://tvnewscheck.com/article/top-news/225239/scripps-open-acquisitions/

Update on Scripps

While it was raking in record amounts of political advertising revenue, The E.W. Scripps Co. was also trading assets like a rug merchant, and may not be done yet. EVP-CFO Lisa Knutson told analysts attending its financial results conference call. “On the acquisition front, it’s been a busy few weeks and we certainly believe we’re not done yet.”

Knutson said that the full-year political total of $140 million in political is a company record, and is 86% better than the its 2014 results — $40 million of the total came in during 3Q. Local Media President Brian Lawlor said that $80 million will be reported in 4Q results.

 

[Y2kTheNewOldies]

https://www.ftvlive.com/sqsp-test/2019/2/6/doj-signs-off-on-scripps-cordillera-deal

Here is an update

That didn’t take long….

The The Justice Department has given its OK to sale of 15 TV stations from Cordillera Communications to Scripps.

The dollar amount pegged to the deal was $521 million.

The deal was announced back in October and despite the government shutdown it already has the DOJ’s blessing.

The DOJ sign off means they have no issues that would cause the deal to be blocked or conditioned. The deal gives Scripps 51 stations in 36 markets reaching 21% of U.S. households.

 

[Y2kTheNewOldies]

https://www.broadcastingcable.com/news/fcc-oks-scripps-purchase-of-cordillera-stations


An Update on the Scripps/Cordillera talks

The FCC has approved the sale of Cordillera Communications TV stations to Scripps plus the sale of one Cordillera station to Quincy. In fact the sale of the Cordillera stations to Scripps is contingent on that spin-off of KVOA(TV) Tucson.

The Department of Justice gave its OK to the deal Feb. 5

Scripps has also been given permission to continue operating Cordillera's KBZK Bozeman, Mont., as a satellite of Cordellera's KXLF-Butte. The FCC requires a showing that no other buyer was available to operate the station independently, which Scripps established to the FCC's satisfaction.

The license transfers were unopposed.

 

[Y2kTheNewOldies]

https://tvnewscheck.com/article/top-news/234541/scripps-closes-on-cordillera-stations-purchase/


Update on the Scripps/ Cordillera deal

The E.W. Scripps Co. said Wednesday that it has closed its $521 million acquisition of 15 television stations in 10 markets from Cordillera Communications.

The acquisition grows the Scripps local television station footprint to 52 stations in 36 markets with a reach of nearly 21% of U.S. TV households.

The Cordillera stations diversify Scripps’ affiliate relationships, adding more NBC and CBS stations to the company’s strong ABC roster.

The stations joining Scripps’ television portfolio today are:

WLEX, the NBC affiliate in Lexington, Kentucky
KOAA, the NBC affiliate in Colorado Springs, Colorado
KATC, the ABC affiliate in Lafayette, Louisiana
KSBY, the NBC affiliate in Santa Barbara-San Luis Obispo, California
KRIS, the NBC affiliate, and KAJA, a Telemundo affiliate, in Corpus Christi, Texas
KPAX and KAJJ, the CBS affiliates in Missoula, Montana
KTVQ, the CBS affiliate in Billings, Montana
KXLF and KBZK, the CBS affiliates in Butte-Bozeman, Montana
KRTV, the CBS affiliate, and KTGF, the NBC affiliate, in Great Falls, Montana
KTVH, the NBC affiliate, and KXLH, the CBS affiliate, in Helena, Montana