Viacom announced plans Thursday to buy CBS affiliate KOVR Sacramento from the Baltimore-based Sinclair Broadcast Group for $285 million in cash.
The Viacom TV station group said the purchase would create its ninth duopoly — it already owns the UPN station KMAX Sacramento. The California state capital is the nation’s 19th largest market.
Viacom has duopolies in Los Angeles, Philadelphia, Boston, San Francisco, Dallas, Detroit, Miami and Pittsburgh.
The healthy pricetag drove Sinclair stock higher. Shares closed up 14.1% at $8.41.
Deal requires regulatory approval from the Justice Dept. and the Federal Communications Commission.
Viacom said KMAX provides five hours of local news every weekday and six hours on weekends, and that its weekday morning news broadcast is No. 2 in the market.
Conglom owns 39 stations: 20 CBS, 18 UPN and one independent station.
Broadcasters have been pursuing duopolies since they became legal several years ago. They provide lots of muscle in one market without adding to the national market-share cap that determines how many stations a single group can own.
Sinclair, which started streamlining it operations three years ago, has sold $444 million worth of assets “that were either at a competitive disadvantage, or where we were not able to create a duopoly,” said CEO David Smith. He said the purchase by Viacom “signifies the importance of building a market franchise to effectively compete alongside the cable and satellite giants.”
He added the purchase price “highlights the continued under-valuation of television station assets by public equity holders.”
Sinclair controls 62 television stations in 39 markets.
Separately, Viacom’s CBS inked longterm affiliation agreements with five stations owned by Meredith Corp.
Deal includes four CBS affiliates in Atlanta, Phoenix, Kansas City and Flint/Saginaw, and one UPN affiliate in Portland, Ore.