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Mutual back-scratching in Atlanta

MIAMI — Bud Paxson and Barry Diller, both trying to muscle in on the broadcast market, are scratching each other’s backs in Atlanta.

Financial terms of the deal were not disclosed, but Paxson Communications Corp. will sell its interest in Atlanta station WNGM to USA Broadcasting, giving USA a foothold in the nation’s 10th-largest TV market.

Paxson currently operates WNGM via a time-brokerage agreement with Whitehead Media, from whom it also has an option to buy. Paxson will retain its wholly owned Atlanta outlet WPXA.

As part of the deal with USA, Paxson will acquire another station, KBSP in Portland, Oregon, from Blackstar LLC, in which Diller’s company owns a minority stake. In turn, USA plans to buy up the rest of Blackstar, putting Blackstar’s stations in Orlando, Fla., and Rapid City, S.D., under the USA banner.

Finally, sources said the multi-pronged deal between Paxson and USA involves Paxson getting an early release from long-term affiliation agreements with Diller’s Home Shopping Network for Paxson’s stations in New Orleans and Memphis, Tenn.

For USA, the acquisition of a station in Orlando is key because it extends the company’s reach throughout central and south Florida. USA is gearing up for the spring rollout of a new locally oriented CityVision programming format on its Miami outlet; USA already owns a station in Tampa.

USA also has set a goal of establishing a foothold in all top 10 markets. With Atlanta in the bag, Detroit is the only city in the top 10 where USA does not have any station holdings.

Paxson benefits from the deal by gaining a presence in Portland, the 24th-ranked TV market, for the family-oriented PaxNet web set to bow in late August.

“Portland is one of the nation’s fastest-growing markets and is a key outlet in PaxNet’s national TV distribution chain,” Paxson said.

Counting transactions awaiting completion, West Palm Beach, Fla.-based Paxson has 78 stations across 75 markets, including 42 of the top 50 markets.

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