Chronicle Broadcasting was set to inform NBC this morning whether it had accepted the Peacock’s request for a 30-day exclusive negotiation period over sale of Chronicle’s San Francisco flagship KRON-TV.
As part of its approximately $700 million bid for the station, located in the nation’s fifth-largest market, NBC hoped to preempt other bidders by requesting the 30-day window.
If Chronicle turns down the proposed window, NBC said it would drop its bid to purchase the station altogether. Chronicle would then be free to entertain offers from other suitors, such as Fox.
Fox and NBC have both eyed KRON as the next feather in their station group caps. The two networks own their outlets in the nation’s four largest television markets; ABC and CBS own stations in all top five markets.
NBC-owned stations reach about 28 percent of the country. KRON would add about 2.4 percent to that total, which means NBC would still fall under the 35 percent national ownership cap.
Bids were due today for KRON, which was put on the market earlier this year after the Chronicle Publishing Co., parent of Chronicle Broadcasting, decided to sell off its assets. Chronicle hired New York investment firm Donaldson, Lufkin & Jenrette in May to look at possible strategic options.
Besides KRON, Chronicle owns NBC affil WOWT-TV, Omaha, Neb., and ABC station KAKE-TV, Wichita, Kan. Neither station is included in the KRON sale. But the deal may also include Bay TV, a regional news cable network that operates as a sister to KRON.
NBC has made a hard play for KRON, informing DLJ that any other company purchasing the station would have to contend with major changes in its network affiliation agreement or perhaps even lose its NBC affiliation.
At $700 million, NBC’s stab at KRON would make it one of the costliest station acquisitions ever.
Still, analysts said NBC’s letter to DLJ apparently had a major effect on bidding, bringing down the station’s potential price. Considering the rarity of a station of KRON’s caliber landing on the market, the number was lower than some expected,
“The $700 million surprised me (as being) on the low end,” said Robin Flynn, senior analyst at Paul Kagan and Associates. “The price talk I heard was in the $1 billion range. This is the latest example of how the (network-affiliate) balance of power has shifted to the networks.”
Chronicle Publishing Co. has already sold its San Francisco Chronicle morning newspaper to crosstown rival Hearst Corp., which is set to shutter its afternoon newspaper, the San Francisco Examiner, if it can’t find a buyer.
NBC had no comment, while Chronicle and DLJ didn’t return phone calls.