Scripps 375

In January, the E.W. Scripps Co. revealed plans to sell its 34 radio stations to focus more intently on its television business. Now the company has cut a $521 million deal to buy 15 TV stations in 10 markets from Cordillera Communications. The acquisition will grow the Cincinnati-based media company’s local television station footprint to 51 stations in 36 markets with a reach of nearly 21% of U.S. TV households.

Scripps is in the process of selling its radio division to four buyers in separate deals. On Nov. 1, the company is expected to close on its $16 million sale of news/talk powerhouse WTMJ (620, 103.3) and country WKTI (94.5) in Milwaukee to Craig Karmazin’s Good Karma Broadcasting. In early October, Griffin Communications closed a $12.5 million deal to buy five radio stations in Tulsa from Scripps. Lotus Communications is buying eight stations in Boise and Tucson for $8 million. And SummitMedia is picking up 19 radio stations in four markets from Scripps for $47 million.

October has been a big month for deal making at Scripps. Less than two weeks ago, it announced a $150 million deal to buy digital audio tech and measurement provider Triton.

In addition to bolstering its reach, the blockbuster TV deal improves Scripps’ market leadership, with all but one of the Cordillera stations ranked No.1 in their markets. Seven of the 10 markets are new locations for Scripps. The other three will give it TV duopolies in Helena and Great Falls, MT and Corpus Christi, TX.

Scripps says the transaction will strengthen its TV portfolio, giving it the No. 1 Nielsen-rated TV stations in 11 of its 36 markets.

The stations also diversify Scripps’ affiliate relationships, adding more NBC and CBS stations to its ABC-heavy roster. Post-merger, Scripps’ 51 stations will include 18 ABC affiliates, 11 NBC stations, seven CBS stations and two Fox stations. Scripps will operate a total of seven duopolies.

Stations included in the deal are:

*WLEX, the NBC affiliate in Lexington, KY

*KOAA, the NBC affiliate in Colorado Springs, CO

*KATC, the ABC affiliate in Lafayette, LA

*KSBY, the NBC affiliate in Santa Barbara-San Luis Obispo, CA

*KRIS, the NBC affiliate, and KAJA, a Telemundo affiliate, in Corpus Christi, TX

*KPAX/KAJJ, a CBS affiliate in Missoula, MN

*KTVQ, a CBS affiliate in Billings, MN

*KXLF/KBZK, the CBS affiliate in Butte-Bozeman, MN

*KRTV, the CBS affiliate, and KTGF, the NBC affiliate, in Great Falls, MN

*KTVH, the NBC affiliate, and KXLH, the CBS affiliate, in Helena, MN

Strong Local Brands

The Cordillera stations have strong local brands and are well run and nicely positioned in their markets, said Brian Lawlor, president of Scripps’ Local Media division.

“Through this transaction, Scripps will operate the No. 1-rated TV stations in a third of its markets, enhancing the durability of our portfolio,” Lawlor added. “The acquisition also allows us to go deeper in new markets with the addition of three new duopolies, including two with Big Four combinations.”

Adam Symson, Scripps president and CEO, said the transaction leaves Scripps with dry powder for more deal making: “We will continue to pursue all appropriate avenues to enhance the scale and operating performance of our local media portfolio.”

The 10 Cordillera markets have about 700 employees. Cordillera Communications is owned by Evening Post Industries. Scripps is not buying Cordillera’s remaining station in Tucson because it already operates a duopoly in that market. There are no other overlapping markets.

Scripps says it will pay for the deal through a term loan underwritten by Wells Fargo. Scripps’ existing Term Loan B and senior unsecured notes will remain in place. The company says its total leverage ratio, net of cash, would be about 4.8 times at closing, including estimated synergies.

The deal is expected to close in first quarter 2019.