Sinclair buys Guy Gannett TV stations $310 million deal gives firm ABC, CBS, NBC outlets in small markets

One of them to be sold

Purchase diversifies portfolio of Fox, UPN, WB outlets


September 09, 1998|By Mark Ribbing | Mark Ribbing,SUN STAFF

Continuing its aggressive acquisition strategy, Baltimore-based Sinclair Broadcast Group Inc. said yesterday that it is buying Guy Gannett Communications' seven television stations for $310 million in cash.

The deal gives Sinclair a collection of small-market stations affiliated with the Big Three networks: ABC, CBS and NBC.

Sinclair has generally preferred to buy stations affiliated with newer broadcast networks: Fox, UPN and the WB Network. In Baltimore, for example, Sinclair owns Fox affiliate WBFF-TV and programs the WB Network's WNUV-TV. Nationwide, Sinclair owns or operates 22 Fox stations, making it one of the biggest Fox broadcasters in the country.

"The Gannett properties are very strong news operations and will help us diversify our network affiliations," said Patrick J. Talamantes, Sinclair's director of corporate finance.

"We like the prospects of Fox, WB and UPN, and we want to position ourselves with those networks, but we want to be careful to be diversified to all six networks," he said.

Sinclair said it plans to sell one of the Guy Gannett stations, WOKR-TV in Rochester, N.Y., to the Ackerley Group Inc. of Seattle, though the sale terms have not yet been finalized. Sinclair already owns another Rochester television station, WUHF-TV. FCC rules prevent a company from owning two or more television stations in the same market.

The Guy Gannett stations that Sinclair is keeping are KGAN-TV in Cedar Rapids, Iowa; WGGB-TV in Springfield, Mass.; WTWC-TV in Tallahassee, Fla.; and WGME-TV in Guy Gannett's hometown of Portland, Maine, along with two stations in central Illinois, WICS-TV in Springfield and WICD-TV in Champaign.

"They're getting a very good price," said William Meyers, an analyst at BancBoston Robertson Stephens in New York. Meyers said he expects Sinclair to gain about $125 million for the sale of the Rochester station to the Ackerley Group.

"They pick up some important Big Three network stations that are significantly under-performing," said Tim Wallace of Lehman Brothers Inc. in New York. "Sinclair has an outstanding reputation for improving margins."

Shares in Sinclair lost 31.25 cents yesterday to close at $18.125 on the Nasdaq stock exchange.

Sinclair said it hasn't yet made a final decision about how to fund the deal. The company is considering a debt or equity issuance, and may sell some stations.

The Guy Gannett purchases are just the latest in a string of Sinclair station acquisitions. On July 1, Sinclair closed on its purchase of television broadcaster Sullivan Broadcast Holdings Inc., a deal valued at about $1 billion. Six days later, Sinclair completed its $252 million acquisition of radio and television broadcaster Max Media Properties LLC.

If all pending acquisitions are completed, Sinclair will own or program 64 television stations in 42 separate markets and 51 radio stations in 10 separate markets.

The deal with Guy Gannett is subject to Justice Department and Federal Communications Commission approval, and is expected to be completed in the second quarter of 1999.

Sinclair will need FCC waivers in order to complete the transaction, since some of the Guy Gannett stations reach areas already served by Sinclair stations.

Guy Gannett's central Illinois stations have service areas that overlap with two Sinclair holdings, KDNL-TV in St. Louis and WYZZ-TV in Peoria, Ill.

The Cedar Rapids, Iowa, station reaches markets already served by Sinclair's KDSM-TV in Des Moines, Iowa.

The sale to Sinclair marks the end of the road for privately owned Guy Gannett, which was founded in 1921. After the heirs to the firm said they planned to sell it once they took over, the trustees who currently run Guy Gannett decided to sell the company's assets now rather than risk a future downturn in the market.

Last Tuesday, Guy Gannett sold its newspaper, direct marketing, and new-media holdings to the Seattle Times Co. for an undisclosed price.

"There would be a sale at some point," said Guy Gannett spokesman Ted O'Meara. "Do you wait and let the future of the company be decided by how long the trustees would be alive, or do you deal with it now? The market conditions were such that the properties were extremely valuable now." Guy Gannett is not affiliated with Gannett Co. Inc., which owns USA Today and other newspapers nationwide.

Sinclair's year

TV stations that have been acquired by Sinclair Broadcast Group in 1998:


WEAR-TV, Mobile, Ala./

Pensacola, Fla.

WFGX-TV, Mobile, Ala./

Pensacola, Fla.

WCHS-TV, Charleston/

Huntington, W.Va.

WZTV-TV, Nashville, Tenn.

WUXP-TV, Nashville, Tenn.

WUTV-TV, Buffalo, N.Y.

KOKH-TV, Oklahoma City

WXLV-TV, Greensboro/

Win.-Salem/High Point, N.C.

WUPN-TV, Greensboro/

Win.-Salem/High Point, N.C.

WKEF-TV, Dayton, Ohio

WRGT-TV, Dayton, Ohio

WVAH-TV, Charleston/

Huntington, W.Va.

WRLH-TV, Richmond, Va.

WUHF-TV, Rochester, N.Y.

WMSN-TV, Madison, Wis.

WTAT-TV, Charleston, S.C.

WMMP-TV, Charleston, S.C.

WSYT-TV, Syracuse, N.Y.

WNYS-TV, Syracuse, N.Y.

KBSI-TV, Paducah, Ky./

Cape Girardeau, Mo.

WDKA-TV, Paducah, Ky./

Cape Girardeau, Mo.

WEMT-TV, Tri-Cities, Tenn.-Va.

RTC KETK-TV, Tyler/Longview, Tex.

KLSB-TV, Tyler/Longview, Tex.


WMHQ-TV, Albany/

Schenectady/Troy, N.Y.

WNEQ-TV, Buffalo, N.Y.

WGME-TV, Portland, Maine

WICD-TV, Champaign, Ill.

WICS-TV, Springfield, Ill.

KGAN-TV, Cedar Rapids, Iowa

WGGB-TV, Springfield, Mass.

WTWC-TV, Tallahassee, Fla.

Includes stations that Sinclair programs, but does not own; and does not include stations that Sinclair bought, but subsequently sold.

SOURCE: Sinclair Broadcast Grp

Pub Date: 9/09/98

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