NBC Universal has struck a deal with Chicago-based Citadel Investment Group that calls for Citadel to take over NBC U’s controlling interest in ION Media, the network and station group formerly known as Pax TV, and take the company private.
The deal calls for Citadel to buy out ION’s outstanding stock at $1.46 per share, or about $73 million, and invest $100 million in the company founded by entrepreneur Lowell “Bud” Paxson. But it also gives NBC U a chit to buy back its stake in five year’s time.
NBC U bought out founder Paxson in November 2005 and installed former NBC exec Brandon Burgess as CEO. The Peacock has been prevented from taking full control of the company because it would run afoul of Federal Communications Commission limits on TV station ownership. NBC U already owns 25 TV stations through its NBC and Telemundo O&Os.
The Citadel buyout was approved last week by ION’s board of directors but still needs to be approved by shareholders and is subject to regulatory approvals for ION’s 60 TV stations.
A separate offer to take over and infuse capital into ION was fielded last week by Greenwich, Conn.-based Contrarian Capital Management and two other funds. In a Securities and Exchange Commission filing last week, ION said the Contrarian offer was under review, but on Friday, the company announced the board’s approval of the Citadel proposal.
NBC U has had a rocky relationship with the erstwhile Paxson Communications ever since it invested in the Florida-based broadcaster in 1998. ION’s programming is available in more than 80% of U.S. TV households, thanks in large part to federally mandated cable carriage of local broadcast TV stations, but the stations are generally obscure UHF outlets that suffer from low viewer circulation.
NBC U has made more than one effort to juice up the programming and marketing of the channel but was stymied by conflicts with management during the years when Paxson controlled the company.
Under Burgess’ direction, ION has taken a page from the Nick at Nite playbook by programming vintage TV series reruns (“Mama’s Family,” “Charlie’s Angels,” “The A-Team,” etc.) in primetime in an effort to target the boomer demographic of adults 35-64. At its upfront presentation to advertisers last week, ION also unveiled a deal with producer Robert Halmi’s RHI Entertainment for a series of original miniseries and telepics, as well as older titles from the Halmi vault.