Sinclair Broadcast Group buys Barrington Broadcasting

Posted: Feb. 28, 2013 10:07 pm Updated: Mar. 14, 2013 10:15 pm

Sinclair Broadcast Group has announced an agreement to buy 18 television stations owned by Barrington Broadcasting Group for $370 million and to operate or provide sales service to another six stations.

The 24 stations -- including KHQA in Quincy and KTVO in Kirksville -- are located in 15 markets and reach 3.4 percent of U.S. television households.

Sinclair anticipates the transaction, subject to approval by the Federal Communications Commission and antitrust clearance, will close in the second quarter of 2013.

The purchase expands the new smaller market group that Sinclair started with the acquisition of Cox Media stations.

"The Barrington stations are an important part of that strategy, providing meaningful scale to the group. Including synergies, we believe the Barrington stations can generate approximately $71 million of cash flow, on average," Sinclair President and CEO David Smith said in a news release. "When combined with the Cox stations, we expect our expertise and resources to create approximately $29 million in synergistic, incremental cash flow, equating to approximately $232 million of added equity value or $2.85 per share."

Steve Pruett will be joining Sinclair's senior management team as chief operating officer of Chesapeake TV, the company's smaller-market TV group.

Pruett, who most recently served as CEO of Communications Corporation of America's 25 television station group, will oversee the growth and development of Sinclair's small market strategy.

"The competitive environment for local affiliate television is changing rapidly," Pruett said in the news release. "Chesapeake TV represents a tremendous opportunity to build scale and efficiency and to strengthen competitive positioning in small markets by applying Sinclair's resources, discipline and management systems, which in my observation are world class. Our vision is big, and with the backing of Sinclair, we have what it takes to execute it."

Pruett has more than 30 years of experience in the broadcast industry with an extensive background in television station finance and management.

Sinclair expects to finance the Barrington purchase price, less $20 million in deposits, through a bank loan and by accessing the capital markets.

Barrington was formed in 2003 to acquire and operate television stations in smaller markets across the United States, according to its website. Barrington owns, operates or supports the operations of 24 network-affiliated television stations.

It bought KHQA from Chelsey Broadcasting Co. in January 2004 after operating the station since March 2003. Barrington bought KTVO and 11 other stations from Raycom Media in March 2006.

With the Barrington and Cox acquisitions, Sinclair is one of the largest and most diversified television broadcasting companies, and with the Barrington and Cox acquisitions, will own and operate, program or provide sales services to 112 television stations in 61 markets. Sinclair's television group will reach approximately 29.8 percent of U.S. television households and is affiliated with all major networks.

Sinclair's television portfolio will include 27 FOX, 20 MNT, 20 CW, 17 ABC, 15 CBS, 11 NBC, one independent and one Azteca stations.