The TV station biz saw an end-of-year flurry of dealmaking late last week. News Corp. confirmed it will shed some of its stations in medium- and small-sized markets, while Tribune Co. has set up a joint station management venture with the company that is buying those eight outlets from News Corp. for $1.1 billion.
News Corp. announced Saturday that it plans to sell eight Fox O&Os to private equity concern Oak Hill Capital Partners for $1.1 billion in cash — a move widely viewed as an effort to raise some coin to offset some of the $5.2 billion that News Corp. has committed to buy Wall Street Journal parent Dow Jones & Co. The stations to be acquired by Oak Hill include WJW Cleveland, KDVR Denver, KTVI St. Louis and WDAF Kansas City, Mo.
The day before the News Corp.-Oak Hill pact was unveiled, Tribune confirmed that it has cut a deal with Oak Hill Capital-owned Local TV to create a joint station management venture that will now include the eight stations Oak Hill is acquiring from News Corp. Covington, Ohio-based Local TV was formed in January after Oak Hill bought nine small-market TV stations from the New York Times Co. for $575 million.
Last January, Oak Hill tapped industry vets Randy Michaels and Bobby Lawrence to run Local TV. Michaels last week was named topper of Tribune’s interactive and broadcasting unit, following the completion of Tribune’s $8.2 billion takeover by real estate mogul Sam Zell and its transition from a public to private company. Lawrence, who’s now CEO of Local TV, previously worked with Michaels at the Zell-owned radio station owner Jacor Communications in the 1990s.
Michaels will serve as head of the station management venture, dubbed the Other Co., which will focus on providing administrative, research, technology support and other back-office functions to the 23 stations owned by Tribune and Local TV’s nine outlets, which will soon swell to 17. Oak Hill’s purchase of the News Corp. stations is expected to close in the third quarter of next year.
Tribune said the Other Co. would provide shared services to all the stations but function as a wholly owned subsidiary of Tribune. “We are going to find new ways to operate smarter, cheaper and more efficiently,” Michaels said.
Lawrence said the venture would eventually expand to address “market-specific challenges and opportunities with special SWAT teams, developing vertical and homegrown content, and finding new ways to deploy capital.”
Tribune and Local will continue to maintain separate boards and senior management teams at the stations, while those functions that are “common across corporate headquarters will be combined in a transparent manner to both companies,” Tribune said in announcing the partnership with Local TV.
The management partnership deal with Local TV spurred speculation of staff cutbacks at the Tribune-owned stations. A Tribune spokeswoman said the partnership’s focus was not downsizing but “expanding our national footprint” to increase the stations’ ability to compete for talent and programming.