Tribune to buy 19 local TV stations for $2.73 billion
By Jennifer Saba and Greg Roumeliotis
(Reuters) - Tribune Co said on Monday that it would acquire 19 television stations from Local TV Holdings LLC for $2.73 billion in cash, making it the largest TV broadcaster in the United States.
The purchase from New York private equity firm Oak Hill Capital Partners is another step for Tribune, the publisher of the Los Angeles Times and the Chicago Tribune, in transforming itself largely to a broadcast company as it seeks to sell off its newspaper division.
Tribune, which currently has 23 television stations and eight newspapers, emerged from bankruptcy protection in December.
With Local TV, Tribune will now have stations in large markets like New York, Los Angeles, Miami, Cleveland, Denver and Seattle and will reach the most households in the United States. Its shares were up 6.6 percent at $60.65 on the pink sheets in afternoon trading.
The purchase is especially important for its WGN America, a national feed of its Chicago TV stations that it repackages as a superstation and distributes through cable and satellite to more than 76 million homes.
Besides advertising revenue, TV stations get retransmission fees from cable companies looking to broadcast their programs on local TV.
"Retrans is a growing stream of revenue," said Benchmark Co analyst Edward Atorino. "Internet revenue a few years ago was peanuts; now it's getting into tens of millions of dollars. Mobile TV revenue is on the horizon."
Tribune Chief Executive Officer Peter Liguori said the deal "clarifies and accelerates Tribune's strategy for growth." Continued...