Forum and wire reports, Published November 20 2013
UPDATED: KVLY and KXJB sold as part of 20-station acquisition
Broadcaster Gray Television Inc. and Excalibur Broadcasting LLC stated they would buy 20 stations from Hoak Media LLC and Parker Broadcasting Inc. for $335 million in cash, sending Gray’s shares up as much as 19 percent.
Gray, which has been expanding across the United States this year, said the deal would add to its portfolio of stations in the central United States.
Gray will acquire 16 ABC, CBS, NBC and Fox affiliates and satellite stations in South Dakota, North Dakota, Colorado, Nebraska, Louisiana and Florida. The stations include Fargo-Moorhead area NBC affiliate KVLY, and NBC affiliates KFYR of Bismarck, KMOT of Minot, KUMV of Williston and KQCD of Williston, all in North Dakota.
Excalibur, owned by Gray’s former regional vice president, Don Ray, will buy four stations in Nebraska, North Dakota, Louisiana and Colorado, including F-M CBS affiliate KXJB.
Hoak Media owned KVLY and has operated KXJB under a management deal with Parker Broadcasting. Since 2007, the stations have simulcast their evening news casts.
KVLY/KXJB General Manager Jim Wareham provided the following written statement regarding the sale:
“Valley News Live is very pleased that we will be a part of Gray Television. Their commitment to local news is very strong and they operate the top news stations in their markets. It will be business as usual at Valley News Live as we continue to provide the best news and weather coverage in the valley.”
Excalibur also plans to buy North Dakota Fox affiliates KNDX of Bismarck and KXND of Minot from Prime Cities Broadcasting Inc. for $7.5 million.
Gray has signed agreements to provide back-office services and limited programming to Excalibur.
As advertising revenues and audience numbers decline, broadcasters are renewing their appetite for TV stations, which have multi-revenue streams including from cable operators, who pay retransmission fees to the stations to carry their channels.
Gannett Co. Inc., the largest U.S. newspaper publisher, bought television company Belo Corp. for $1.5 billion in June, while Tribune Co. said in July that it would buy 19 television stations from Local TV Holdings LLC for $2.73 billion.
Wells Fargo analyst Marci Ryvicker called Gray’s deal with Hoak a positive surprise that could be “potentially transformative” for Gray.
Gray expects the transactions to immediately add to its free cash flow.
The deals are expected to close in the first or second quarters of 2014.
Gray’s shares were up 15 percent at $10.84 in afternoon trading Wednesday.