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The Tribune Saga, Part 3: New Sale Talks


mre29

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Let me lead off with this just to break the ice.

 

It doesn't matter what Tribune does at this point, all I ask out of Tribune is stop trying to sell all 42 statins to 1 company, you're way too big for that, you'd be a lot better off by selling the 42 stations in pieces

 

It's only 42 stations. I assume you're talking about valuation, that they're too expensive, which also doesn't fly. That being said, a private equity firm may be better able to take on the debt load if they acquired all 42 stations and related properties.

 

It's not the fact that Tribune is too big because other companies have acquired twice that amount of stations before (think Nexstar-Media General) but it's just the fact that they eat up cap space. No company will be able to buy them whole. It's not quantity, as we keep saying.

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It's not the fact that Tribune is too big because other companies have acquired twice that amount of stations before (think Nexstar-Media General) but it's just the fact that they eat up cap space. No company will be able to buy them whole. It's not quantity, as we keep saying.

 

Someone remind me what Tribune's current share of cap space is. Or, even better, point me to an up-to-date list of all station groups that shows those numbers. :)

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They're currently at 42% I think. Idr if that's with or without the discount.

 

I was going to suggest that Graham could buy them whole, but if Tribune's reach is that high, I don't think even Stephen Marks could buy them!

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I was going to suggest that Graham could buy them whole, but if Tribune's reach is that high, I don't think even Stephen Marks could buy them!

 

Graham would be a good owner for all of them, so I can't argue with that but I think Graham would have the most interest in the big 3, possibly KDAF and KIAH and all of Tribune's Big 3 stations. Feel free to disagree but that's how I feel.

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Graham would be a good owner for all of them, so I can't argue with that but I think Graham would have the most interest in the big 3, possibly KDAF and KIAH and all of Tribune's Big 3 stations. Feel free to disagree but that's how I feel.

 

KIAH maybe, KDAF no way.

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Putting market size and price aside for a moment, not all Tribune stations are equal and neither are all potential buyers. Some Tribune stations are very turn-key, including KTLA, WGN and KFOR. New owners have to do little more than write the check and change the name on the license.

 

But other Tribune stations need to be completely rebuilt inside and out. Dallas, Philadelphia, Miami, New Orleans and some others are virtual operational and physical disasters. Those stations need owners who are prepared to pony-up the management expertise and dollars to make them worth the investment. Not all potential owners will have that desire or ability. If a purchaser isn’t able or willing to make substantial investments in these stations, then they are no improvement. In fact, in taking on new debt with no desire to build long-term value, they might be worse.

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Okay. Why does the private equity firms want to come back to the broadcast business, after selling off a few years ago?

The same reason that they bought and left a decade ago: buy into the company, cut back at expenses across the board, and sell to someone else for a good profit.

 

It was what Starboard tried to do with Tribune... the sale to Sinclair would have netted them a tidy profit from their purchase into the company two years ago. Only... Sinclair totally botched the sale.

 

If a PE firm buys Tribune outright, it’s going to be another KKR. KKR bought Storer Broadcasting and WTVJ in 1985, and effectively dismantled it through multiple sales... WTVJ went to NBC, WTVG (having lost grandfathered protection due to overlap with WJBK and WJW) went to Lilly, and junk bond specialist George Gillett bought the rest (and he eventually had to spin them off back to KKR as “SCI,” with New World Pictures buying most of them, you know the rest lol).

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Graham would be a good owner for all of them, so I can't argue with that but I think Graham would have the most interest in the big 3, possibly KDAF and KIAH and all of Tribune's Big 3 stations. Feel free to disagree but that's how I feel.

That would be funny if Graham bought back into Washington DC via WDCW after its corporate antecedent was forced to unload WTOP AM/TV 41 years prior.

 

I just don’t see Graham wanting to make such a major splash, especially with the “big three.” They’ve been very conservative and playing it safe with their purchases (WSLS) and sales (WPLG).

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I just don’t see Graham wanting to make such a major splash, especially with the “big three.” They’ve been very conservative and playing it safe with their purchases (WSLS) and sales (WPLG).

 

Yeah, I'd say they're pickier than even Hearst.

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KDAF does produce Morning Dose so they're a possibility. WPHL is too. Again, feel free to disagree.

 

Not anymore as of November 6 according to a story on newsblues today. KDAF and KIAH are also ending their nightly Newsfix shows, but KIAH is adding a 3 hour news in the morning.

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How is it that KDAF and KIAH just toddle along yet they had to dump WLVI?

 

Tribune's current management is paying dearly for the company's overexpansion...they overpaid for Local TV and the Renaissance Communications buyout looks worse and worse.

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If they were to be broken up in parts, there is enough diversity in the stations to allow for separate buyers to buy groups of stations. Not to speculate, but a group like Graham could buy some of the better stations and the weaker and more starved for resources ones could end up in getting sucked back into private equity....

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Yeah, I'd say they're pickier than even Hearst.

Tribune's current management is paying dearly for the company's overexpansion...they overpaid for Local TV and the Renaissance Communications buyout looks worse and worse.

If you’re a part of the board of directors for either Graham and Hearst, and watched Tribune make those purchases (LocalTV, Renaissance, and even Times-Mirror on the newspaper side) that each turned out to be heavily detrimental to the conglomerate... wouldn’t it make you want to be exceptionally picky with your M&As?

 

Graham and Hearst followed the exact opposite course as Tribune, and both companies are still predominantly family-owned with a minimum of debt to their names. Of note, Graham shedding WPLG turned out to be beneficial for both buyer (Warren Buffet) and seller... same thing when Graham unloaded the WaPo to Jeff Bezos to focus specifically on television.

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Anything would be a better replacement than News with a Twist. Hell, monkeys flinging poo would be a better replacement than News with a Twist.

 

I don't know about monkeys flinging poo, but a live camera inside a refrigerator for a half hour would be better than News With a Twist! (I'd love to tell you where I got that idea, but I'll save it for another post.....)

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