Media General inks deal, prepares to sell off papers
NEW YORK – Broadcaster-publisher Media General Inc. completed its $710 million acquisition of the TV and newspaper properties of Park Communications Tuesday and declared it is ready to do more such acquisitions.
At the same time Media General said it was selling 61 of the newspapers and one of the TV stations it acquired from Park, WUTR in Utica, N.Y., because it wants to retain its geographic focus in the southeastern United States. Media General had acquired 113 newspapers and 10 TV stations in the deal that was first announced last July.
Sale of WUTR has not been finalized, but Media General said the newspaper sales would generate $138 million, which is to be plowed back into further acquisitions. It already has acquired a Virginia newspaper for $48 million, leaving about $85 million to spend on other newspapers, Media General chairman Stewart Bryan said.
At the same time the company has arranged a new $1.2 billion credit line with its bankers. Most of the credit line has been used to cover the costs of the Park deal, which in addition to the $710 million cash price includes $476 million in debt assumed from Park’s balance sheet. Bryan said $175 million of the credit line would be unused and available for acquisitions.
Bryan said the completion of the Park deal was the “culmination of a nine-year restructuring of the company” in which its business was narrowed down to communications and entertainment serving the southeast, which is growing faster than the rest of the country. He added that there was “more to be done” to grow.
The Park deal increased the broadcast side of Media General’s business, giving it a total of 13 stations covering 5.4% of U.S. households, but it remains strongest in publishing, and Bryan said newspapers would be the company’s first choice in an acquisition. And if the FCC allows duopoly ownership of TV stations in a market, “we would certainly look at” pursuing duopoly in its TV markets.
In addition to the sale of WUTR, Media General said it would swap WTVR in Richmond, Va., for WSAV in Savannah, Ga., and WJTV/WHLT in Jackson and Hattiesburg, Miss., to comply with FCC requirements on approval for the Park acquisition.