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LIN is merging with Media General


CircleSeven

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LIN has announced that it will merge with Media General for $1.6B. The deal is subject to certain divestitures.

 

Current LIN shareholders would hold 36% of the company, while existing Media General shareholders will keep 64%. Post-Merger it will keep the Media General name.

 

EDIT: According to the release, LIN will have some sort of "Window-Shop" period for third-party entities who might want to send an acquisition inquiry; and LIN will be in discussions with the third party entities that submitted their own proposals. The window shop period will end on April 25. Any successful bidder who comes with a proposal during that window-shop and makes a deal prior to May 15, will only bear a $26.6M break-up fee. However, any bidder who didn't make a proposal during the window-shop, or not made a deal prior to May 15, the break-up fee will be doubled to $57.3M.

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There are a boatload of overlaps. Where MG & LIN currently have stations, those overlaps are in five markets (Birmingham, Providence, Mobile, Green Bay, Savannah (the latter four are LIN duo)), not to mention the cities where LIN have existing shells in seven of those markets (Austin, Albuquerque, Providence, Dayton, Savannah, Youngstown & Topeka) while Media General has shells in two markets (Albany, NY & Lansing).

 

I swear that the heavy speculation back in January that LIN & Meredith were talking, which would've poised only two overlapped markets. Now we'd just talked about yesterday Sinclair announced that will divest it stations in the overlapped markets. It would almost for certain that the mega-MG would have to divest it stations in those overlapped markets.

 

And since they'd said the the deal would be closed in early 2015, I wouldn't be shocked if we don't see them filing the paperwork until those third party deals are made.

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This boosts MG's footprint substantially in the Western US and Hawaii. Suddenly KRON isn't completely isolated from the rest of the MG chain as before.

 

WKBN-TV - and LMA partner WYTV - in Youngstown would tentatively become sister stations to Columbus's WCMH with this merger.

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Whoa! I did not see this coming until today. I Thought Meredith and like were talking about merging and splitting up the overlaps for a few months but an full merger? Wow! Just wow!

 

Next question is: what's going to happen with the overlaps?

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The conflicts:

 

Birmingham - WVTM and WIAT

 

Green Bay - WBAY and WLUK/WCWF

 

Mobile - WKRG and WALA/WFNA

 

Providence - WJAR and WPRI/WNAC

 

Savannah - WSAV and WJCL/WTGS

 

In most cases, I think MG will hold the existing station and sell off the acquiring station. Maybe in Birmingham they might do the switcheroo though. Who could acquire the loose assets though?

 

The FCC shouldn't worry too much about "status quo" shells IMO. They should focus on new shell situations.

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This boosts MG's footprint substantially in the Western US and Hawaii. Suddenly KRON isn't completely isolated from the rest of the MG chain as before.

 

WKBN-TV - and LMA partner WYTV - in Youngstown would tentatively become sister stations to Columbus's WCMH with this merger.

 

Also, that gives WCMH a sister station in Dayton with WDTN as well. What a deal for MG and now that station is now going for the crapper because it's MG... The company that don't spend nothing at all on their news product.

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I would think that they would keep WLUK in Green Bay, because the Packers coverage would be more lucrative (don't think FOX will go into a market that low even if it is an NFC market) but other than that, I would say they would probably keep the MG stations in other conflicted areas.

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So in Birmingham, MG gives up WIAT... Waits, what, 5 or 6 years only to get it back (and after its done a complete 180).

 

I swear I'm hearing merry go round music playing...

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The conflicts:

 

Birmingham - WVTM and WIAT

 

Green Bay - WBAY and WLUK/WCWF

 

Mobile - WKRG and WALA/WFNA

 

Providence - WJAR and WPRI/WNAC

 

Savannah - WSAV and WJCL/WTGS

 

In most cases, I think MG will hold the existing station and sell off the acquiring station. Maybe in Birmingham they might do the switcheroo though. Who could acquire the loose assets though?

 

The FCC shouldn't worry too much about "status quo" shells IMO. They should focus on new shell situations.

 

Barring any other unexpected mergers, we could possibly see either Raycom, Scripps, Nexstar, Meredith or Gray go after some of those stations that will have to be divested after the merger.

 

- Raycom makes the most sense for either WKRG or WALA, as it would complete "Alabama's News Source" on a state level for them (Alabama News Network was already taken by WAKA/WNCF in Montgomery, ironically right in their backyard).

- Scripps or Meredith would likely be in play for one of the Providence or Birmingham stations, with Gray likely being a suitor for the Savannah and Green Bay stations.

- Nexstar would be the dark horse in all of this, as they have no conflicts in all of those markets except for Green Bay.

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The conflicts:

 

Birmingham - WVTM and WIAT

 

Green Bay - WBAY and WLUK/WCWF

 

Mobile - WKRG and WALA/WFNA

 

Providence - WJAR and WPRI/WNAC

 

Savannah - WSAV and WJCL/WTGS

 

In most cases, I think MG will hold the existing station and sell off the acquiring station. Maybe in Birmingham they might do the switcheroo though. Who could acquire the loose assets though?

 

The FCC shouldn't worry too much about "status quo" shells IMO. They should focus on new shell situations.

 

 

 

 

With this is happening. According to the cities that have conflicts. We will see a duopoly in Birmingham. Do Birmingham have enough stations to have legal duopoly. Triopolies in Green Bay,

Mobile Providence Savannah. Most of these need shells. Does MG have shells?

 

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Sorry about the confusion with my post. My post is this: With this is happening. According to the cities that have conflicts. We will see a duopoly in Birmingham. Do Birmingham have enough stations to have a legal duopoly. Triopolies in Green Bay, Mobile, Savannah. Most of these need shells. Does MG have shells

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Wow. Who said M&A was dead in local TV?

 

Looks like there will be some great opportunities to buy into Birmingham. Could it be possible that someone buys WVTM (which is the worse station) and WABM?

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Sorry about the confusion with my post. My post is this: With this is happening. According to the cities that have conflicts. We will see a duopoly in Birmingham. Do Birmingham have enough stations to have a legal duopoly. Triopolies in Green Bay, Mobile, Savannah. Most of these need shells. Does MG have shells

In the case of Birmingham, they have enough stations to form a duopoly. However, in the both WVTM & WIAT, they are both within the top 4 highest rated station by market share. LIN has three shells (Vaughan, Super Towers and Tamer), while MG only has one (Shield). If I was LIN or MG, I would be finding the sutable buyers for those five overlap markets instead using several shell games.
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I agree with Gray for the Savannah and Green Bay stations as they fit well in their portfolios. Yes, a shell will be required no matter what in both markets, but the FCC should loosen up otherwise they would likely have to shut a station down as I see no suitors for a standalone WTGS or WCWF.

 

In Birmingham, I could see Meredith coming in for WIAT, or Scripps for WVTM, but not the other way around (due to networks they primarily hold).

 

In Providence, Meredith taking on the WPRI/WNAC duopoly makes most sense, it would also build them a cluster in southern New England as well. Again, WNAC is shell bait regardless. If WJAR goes, then Hearst makes most sense, since they have a large cluster in New England which could be added on to.

 

In Mobile, Raycom is the obvious one for WALA/WFNA (a legal duopoly). I doubt Media General would want to let go of WKRG (is that a legacy station, or one from the Spartan purchase?)

 

As for who could absorb them whole?

*Gray could, but Birmingham is beyond their size range and Providence is a poor fit for them geographically.

*Hearst could, although not sure what their interests are and they have no shells so likely wouldn't want the duopolies. Most likely they would want the existing Media General stations for the most part.

*Scripps could, but they also have no shells and no CBS or Fox affiliates.

*Gannett could, but are they up to buying more after the Belo purchase?

*Meredith could, and might be the most likely straight-up buyer.

 

Those with other conflicts: Raycom has 2 (Birmingham and Savannah), Sinclair has 2 (Birmingham and Mobile, both BIG ones), Nexstar has 1 (Green Bay; Birmingham likely out of their market size range) and Journal has 1 (Green Bay, but are they expanding?).

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Sorry about the confusion with my post. My post is this: With this is happening. According to the cities that have conflicts. We will see a duopoly in Birmingham. Do Birmingham have enough stations to have a legal duopoly. Triopolies in Green Bay, Mobile, Savannah. Most of these need shells. Does MG have shells

Yes, on the MG side, LIN has six or seven shells in Youngstown,

Providence and Topeka.

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Wow. As a GB market resident, I can't wait to see what happens.

 

I do agree with the comment re. WLUK and the NFL/Packers----LIN/MG would probably want to hold on to them for that reason. WBAY is [and has been] #1 in news in the market, but they are an ABC affil.....I can see Gray or Hearst possibly grabbing them up [despite the station recently joining the MG portfolio].

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This boosts MG's footprint substantially in the Western US and Hawaii. Suddenly KRON isn't completely isolated from the rest of the MG chain as before.

 

WKBN-TV - and LMA partner WYTV - in Youngstown would tentatively become sister stations to Columbus's WCMH with this merger.

 

Likewise with WDTN/WBDT, WISH/WNDY and the Fort Wayne Stations.

 

WDTN and WCMH were formerly WLWD and WLWC! WTHR would have been the Crosley/Avco station in Indy, but WISH is close enough.

 

 

 

 

 

In Birmingham, I could see Meredith coming in for WIAT, or Scripps for WVTM, but not the other way around (due to networks they primarily hold).

 

In Providence, Meredith taking on the WPRI/WNAC duopoly makes most sense, it would also build them a cluster in southern New England as well. Again, WNAC is shell bait regardless. If WJAR goes, then Hearst makes most sense, since they have a large cluster in New England which could be added on to.

 

In Mobile, Raycom is the obvious one for WALA/WFNA (a legal duopoly). I doubt Media General would want to let go of WKRG (is that a legacy station, or one from the Spartan purchase?)

 

 

I doubt they let go of WVTM because they would probably have to report a huge tax loss, unless it has already been written down. Despite today's high prices for television stations, I would guess that the price MG paid for that station is still more than what they could get for it today.

 

But then again, they used to own WIAT before they bought WVTM and WIAT has the better signal and better ratings.

 

Buuuuuutttttt .... duopolies make money. So would they keep the Lin stations or the duopoly partner so they can double up on profits?

 

I thought MG was going to be a goner in this round of consolidation. Surprise, surprise.

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