NEW YORK — Paxson Communications on Monday sealed a deal to buy WBIS New York from Dow Jones and ITT Corp. for $257.5 million.
Despite an embarrassingly brief —and largely failed — attempt to create a strong local broadcast station with a hybrid of local business news and sports, the sellers won’t be red-faced financially. The sale price is expected to represent a small gain on the $207 million paid for the station in August 1995, even after tens of millions of dollars spent on new studios and talent (Daily Variety, April 29).
Industry execs at the time said ITT and Dow vastly overpaid for the station, formerly city-owned pubcaster WNYC. “When we bought the station we were severely criticized,” said one exec. “This is an exoneration of sorts.”
The pricetag is extremely rich, reflecting the scarcity of available broadcast outlets in the country’s largest TV market.
ITT already had planned to sell its 50% stake, along with a half-interest in Madison Square Garden, to thwart a hostile takeover bid from Hilton Hotels Corp., leaving Dow with the choice of finding a new partner, buying out ITT’s stake or selling the station entirely.
News Corp. weighed a bid to buy ITT’s stake and become Dow’s new partner, launching an entirely new version of its current programming format, but was put off by uncertain prospects and hidden costs, including $12 million in talent buyouts.
Paxson’s bid two weeks ago (Daily Variety, April 29) far outweighed other offers, and will result in WBIS’ transformation into WPXN, to be programmed with blocks of infomercials, religious, ethnic and cable programming. Paxson said it also will honor WBIS’ contract to carry 21 weekly hours of Fox Sports Net programming.
But the current mix of business news and sports programming will end on June 29, when most of the channel’s 365 staffers will be laid off. The following day, Paxson will begin programming the station with infomercials, paying a $1.25 million monthly fee plus $150,000 in expenses to lease the time until the FCC clears the deal and the station officially changes hands, probably by year’s end. Games of the New York Knicks and New York Rangers, some of which had been seen on WBIS, will move back to the Madison Square Garden cable network.
In a staff memo, Dow Jones Television prexy Peter Skinner said the sale comes not because of a “change in the company’s television strategy, but because of a completely unexpected and fundamental change in circumstances,” an apparent reference to ITT’s decision to unload the station. Dow “will be exploring alternative vehicles for the distribution of Dow Jones programming in the United States,” Skinner said.