Justice Department Endorses Gannett-Belo Merger With Divestiture Of KMOV

Gannett already owns the local NBC station in St. Louis, KSDK. So it isn’t terribly concerned about the Justice Department’s insistence that it unload “substantially all” of the assets at Belo’s local CBS station, KMOV, as a condition to win antitrust approval for its $1.5B acquisition of the TV station power. “The synergies associated with KMOV-TV were nominal” and won’t change their forecast to realize $175M in savings for each of the first three years after the deal closes, the companies say. Gannett’s local clout “will not be impacted” when KMOV is divested, expected sometime next year. Bill Baer, Assistant Attorney General in charge of Justice’s Antitrust Division, says that KSDK and KMOV “compete head-to-head in the sale of broadcast television spot advertising in the St. Louis area, and this rivalry constrains advertising rates. The full divestiture required by the department will ensure that KMOV-TV will remain a vigorous competitor in St. Louis.” Gannett and Belo still have to win the FCC’s endorsement before the deal can close. But investors are encouraged. Gannett shares are up 1.9% in mid-afternoon trading.