This is the most startling deal yet in the recent consolidation wave among TV station owners. With Local TV‘s 19 stations in 16 markets, Tribune will have 42 stations, up from 23. It will have outlets in 14 of the top 20 markets including New York, Los Angeles, Miami, Seattle, Denver, Cleveland, St. Louis, Kansas City, Salt Lake City and Milwaukee. It will become the largest owner of Fox affiliates, with 14. The deal also will boost Tribune’s status as the CW network’s top distributor, with 14 stations. In addition, Tribune says that it will have five CBS stations, three for ABC, two for NBC, and four independents. “This is a transformational acquisition for Tribune — it makes us the #1 local TV affiliate group in America, expands the distribution platform for our high-quality video content, and extends the reach of our digital products to new audiences across the country,” Tribune CEO Peter Liguori says.
The companies cite most of justifications you usually hear when station groups combine: They’ll improve local news coverage. It will strengthen their ability to capitalize on ad sales “in key political battleground states.” And it will offer economies of scale. Tribune says that it expects to see $100M a year in run-rate synergies within five years. The company says it can pay for the deal with debt and cash on hand. It has lined up $4.1B in financing commitments from JPMorgan Chase, BofA Merrill Lynch, Citigroup, Deutsche Bank and Credit Suisse. That includes a new $300M revolving credit facility so it can refinance its existing debt. Tribune — which emerged from Chapter 11 bankruptcy protection at the end of 2012 — has made it clear that wants to bulk up on TV while it considers plans to sell its newspapers, which include the Los Angeles Times and Chicago Tribune. (more…)