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Media General Completes Deal to Buy Channel 10, 3 Other TV Stations

Posted on: Tuesday, 27 June 2006, 00:00 CDT

By Paul Grimaldi, The Providence Journal, R.I.

Jun. 27--A Virginia media company said yesterday its purchase of Channel 10 (WJAR) and three other NBC stations is complete.

Media General, of Richmond, said in April that it had agreed to buy WJAR and the other stations from NBC Universal for $600 million in cash.

NBC Universal announced in January that it was putting the Providence station, Rhode Island's most watched outlet, up for sale along with stations in Alabama, North Carolina and Ohio. NBC Universal is 80 percent owned by General Electric, the parent company of NBC, and Vivendi Universal.

NBC Universal said it wanted to sell the stations so it could focus on the six major markets where it owns and operates two stations -- one that carries NBC programming and another that carries the programming of its Spanish-language Telemundo unit.

Media General also invests in multi-format media operations. The company owns 26 TV stations, 75 online enterprises, 25 daily newspapers, 100 weekly newspapers and other publications.

Among its key holdings are TV stations in Tampa, Fla., Savannah, Ga., and Charleston, S.C. Its newspaper ownership includes the Richmond Times-Dispatch in Virginia, the Winston-Salem Journal in North Carolina and The Tampa Tribune.

The company holds up the Tampa market as a prime example of its long-term strategy, where the Tampa Tribune, WFLA-TV and TBO.com share offices and workloads.

The four stations it acquired are all in the top 100 media markets in the country, led by Raleigh, N.C. (number 29), Columbus, Ohio (number 32), Birmingham, Ala. (number 40) and Providence (number 51.) Besides WJAR, the other stations are WNCN in Raleigh, WCMH in Columbus and WVTM in Birmingham.

"This acquisition is compelling from both an operational and financial perspective," said Marshall N. Morton, president and chief executive officer of Media General.

Tax savings will cut the purchase cost to $450 million, according to a Media General statement, making the final sale price less than 10 times the 2004-2005 average cash flow for the four stations.

The four stations had gross revenues of $120 million last year, according to Media General.

The purchase will be financed through a mixture of credit, new stock or bonds, refinancing debt and sales of other Media General units.

"We have conservatively estimated operating synergies of $3 million annually by 2008," Morton said in a statement. "The synergies will come from enhanced revenues, which are expected to result from the implementation of Media General's sales training and systems as well as its inventory management and pricing processes.

"Cost reductions will result from bringing the new stations into Media General's central traffic operation and from centralizing master control for all of its NBC stations."

While WJAR and WCMH both lie outside Media General's base in the Southeast, Morton said the two stations will benefit from being located in political battleground states, so they benefit greatly from campaign spending, especially in presidential election years.

Now with nine NBC stations, the company is NBC's third-largest independent affiliate.

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To see more of the The Providence Journal, or to subscribe to the newspaper, go to http://www.projo.com.

Copyright (c) 2006, The Providence Journal, R.I.

Distributed by Knight Ridder/Tribune Business News.

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MEG, GE, V,

Source: Providence Journal

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