Paramount snapped up another TV station Wednesday.
The company has inked a deal to acquire WKBD-TV in Detroit from Cox Enterprises. The station is the No. 1 independent in the market and a Fox Broadcasting affiliate.
This purchase brings the number of Paramount-owned TV stations to seven, with four part of the Fox network and the rest independent UHF outlets. According to the company, the move increases its reach of TV households by 20%.
The pricetag was estimated at around $ 150 million, though no financial terms were disclosed. The station is expected to generate $ 15 million in cash in 1993 on an increase in revenues over 1992. This is leading analysts to feel that Paramount is buying the outlet for strategic reasons. Typical market price for TV stations in a middle-market is around eight times cash flow.
“This adds a very important map tack in the mix of independent stations,” for Paramount, said Bishop Cheen, a senior analyst with Paul Kagan Associates. “When you clear programs, it’s easier from the top down. This is a top 10 market.”
Indeed, though Paramount still doesn’t have a station in the top three markets of New York, Los Angeles or Chicago, WKBD will likely make it easier to clear Paramount’s hourlong syndicated programs in a larger number of markets.
WKBD is considered a strong franchise with broadcast rights to the Detroit Red Wings hockey, Pistons basketball and pre-season Detroit Lions games.
It also strengthens Par’s relationship with Fox, since it now controls a fifth of the top-20 markets. The studio’s considerable programming output could give it greater clout with Fox as the weblet continues to build its weekly schedule.
Cox stunned the broadcast industry when it put the station and KTVU in Oakland/San Francisco, up for sale last November (Daily Variety, Nov. 16, 1992). The pair reportedly were priced at $ 600 million. At the time, Paramount was considered one of the bidders.
The deal, which is subject to regulatory approval and the approvals of the boards of both companies, is expected to be closed by September.