Faced with two options — getting bigger or getting out — Lee Enterprises said Wednesday it plans to sell its TV broadcasting assets in order to focus on publishing, online and information services.
The Davenport, Iowa group owns nine network-affiliated stations: KOIN-6 (CBS) in Portland, Ore; KRQE-13 (CBS) in Albuquerque, N.M.; WSAZ-3 (NBC) in Huntington/Charleston, W.Va.; KSNW-3 (NBC) in Wichita, Kan.; KGMB-9 (CBS) in Honolulu, Hawaii; KGUN-9 (ABC) in Tucson, Ariz.; KMTV-3 (CBS) in Omaha, Neb.; KMAZ-48 (Telemundo) in El Paso, Texas; and KSNT-27 (NBC) in Topeka, Kan.
Lee chairman and CEO Richard Gottlieb said the company has engaged Credit Suisse First Boston and McFarland Dewey & Co. to sell these properties as well as seven satellite TV stations. Discussions with potential buyers will begin immediately, he said, and a deal is likely within two or three months. At the same time, Lee, which owns 21 daily newspapers and more than 80 weeklies, shoppers, classifieds and specialty publications, is evaluating several publishing and online acquisitions.
“Although we believe broadcasting will remain a fine business, we concluded that the relatively small size of our holdings eventually would limit our ability to control our future,” Gottlieb said. Lee’s latest affiliation deal with CBS eliminated all network compensation, a trend that will make the station business just that much tougher for the smaller operators.
Lee’s stations could be worth a reported $360 million — using a multiple of 12 times EBITDA (or earnings before interest, taxes, depreciation and amortization). Station group EBITDA last year was $30 million.