Fox Corp. has cut a deal with Nexstar Media Group to acquire three stations in Seattle and Milwaukee for $350 million.
The pact also calls for Fox to sell two of its stations in Charlotte, N.C., to Nexstar for $45 million.
Fox’s deal to acquire Seattle Fox affiliate KCPQ-TV and Milwaukee’s WITI-TV had long been expected as part of Nexstar’s divestiture of assets following its $4.1 billion acquisition of Tribune Media, which closed in September. Nexstar has to shed some stations as a condition of the FCC’s approval of the merger agreement. The combination of Nexstar’s 170-plus outlets and Tribune’s 41 stations put the enlarged company over the FCC’s station ownership limits in key metrics.
Meanwhile, Fox had long eyed valuable Tribune stations in NFL markets as a good fit with its existing collection of 28 stations, including outlets in nine of the top 10 markets. Seattle (market No. 13) and Milwaukee (market No. 36) both have strong local NFL followings — for the Seahawks and Green Bay Packers — which makes them even more valuable to TV station owners on the local level for ad sales and sponsorship pacts. The deal also includes Seattle’s MyNetworkTV affiliate KZJO-TV. Fox will sell its Charlotte affiliate WJZY-TV and MyNetwork affil WMYT-TV.
The transaction is one of the largest since Lachlan Murdoch took the reins of the slimmed-down Fox Corp. following Disney’s acquisition of 21st Century Fox in March. With Seattle and Milwaukee in the fold, the Fox group will reach 14 of the top 15 markets.
“This acquisition expands the reach of one of Fox’s core assets, our television stations portfolio, and further strengthens what is already a highly profitable and cash generative business,” Murdoch said. “The Seattle and Milwaukee markets both overlap with key sports markets, creating significant opportunities for growth and collaboration.”
Murdoch has signaled his interest in acquire more stations in NFL markets now that the new-model Fox is driven by live news and sports operations. Industry observers predict more transactions may be in store for Fox and Nexstar. The two could be uneasy partners in the coming years as both have a certain leverage over the other. Nexstar accounts for a big slice of Fox broadcast network’s distribution across the country. Fox on the other hand has the leverage of yanking its affiliation agreements with Nexstar stations, which would be a big financial blow when Nexstar can ill afford one.
Added Fox Television Stations CEO Jack Abernethy, “Acquiring stations in these high-performing NFC markets enhances our already strong nationwide footprint and further demonstrates Fox Television Stations’ commitment to serving our viewers, advertisers and local communities.”