Paxson Communications Corp. and Young Broadcasting are among U.S. companies maneuvering to buy, sell or swap media assets after the FCC voted Monday to ease ownership limits.
“The phone has been ringing and there are some parties interested in doing all three, and that’s probably true across all companies,” Young chairman Vincent Young said.
The Federal Communications Commission changed six rules Monday that will allow companies to own more TV and radio stations and newspapers in the same market. Analysts said possible buyers include General Electric’s NBC network; Viacom, owner of the CBS network; and Gannett, the largest U.S. newspaper owner.
“Clearly these are pretty comprehensive and sweeping changes,” said Bishop Cheen, an analyst at Wachovia Corp. “We can expect, in certain sectors, some rather robust dealmaking.”
Paxson, Peacock ponder
Broadcasters such as West Palm Beach, Fla.-based Paxson, owner of 62 U.S. TV stations, were making preliminary inquiries about transactions this week.
Paxson “will be waiting to hear” whether NBC, which owns 32% of the company, intends to increase its stake as permitted by the new FCC rules, Paxson said in a statement.
“NBC has repeatedly said that when the rules were changed they wanted to consider completing their acquisition, and we will have to see if they in fact intend to do that,” chairman Lowell “Bud” Paxson said Monday.
“If not, I think the window is opening soon for us” to unravel our partnership with NBC, he said. “And we might be able to maximize shareholder value significantly by selling these properties.”
NBC said the rule changes won’t necessarily affect whether it decides to buy Paxson.
“We have never viewed regulatory constraints as an issue in our relationship with Paxson,” NBC said in a statement.
Congloms think Young
Young, the New York-based owner of 11 TV stations, said its location in the San Francisco area has “tremendous value” under the new rules. The San Francisco Bay region is the fifth-largest U.S. TV market.
The new regulations allow a company to own as many as three stations, up from two, in the largest U.S. markets, making Young’s San Francisco station an attractive acquisition for large media companies, Cheen said.
The FCC also increased the number of cities where broadcasters can own as many as two stations. That will give operators in midsize markets, such as Sinclair Broadcast Group, more opportunities for acquisitions and sales.
The rule change “opens up a number of Sinclair’s single-station TV markets,” Baltimore-based Sinclair said in a statement Monday. The broadcaster said it will consider purchases and sales that “would not previously have been permitted.”
Hearst to horse-trade?
Hearst-Argyle Television, owner of the largest group of TV stations affiliated with Walt Disney Co.’s ABC TV network, may trade assets with other companies, especially those looking to own a TV station and newspaper in the same market, CEO David Barrett said Tuesday.
“The majority of the players don’t know if they are buyers or sellers,” said analyst Cheen. “It all depends on the situation — and price.”