Media giant Tribune Co. agreed Monday to buy Local TV Holdings LLC’s 19 television stations including WJW in Cleveland for $2.73 billion in cash.
It was the biggest U.S. broadcasting deal in six years, aimed at giving Tribune better negotiating leverage with advertisers and cable companies.
The acquisition of Local TV, principally owned by Oak Hill Capital Partners, will almost double the number of Tribune stations to 42. The Local TV assets include 16 markets, with top-rated stations in Denver, Cleveland and St. Louis, the companies said.
Except for the noon hour, WJW dominates the ratings in Cleveland/Northeast Ohio local news from early morning to late at night, according to May data compiled by research firm Nielsen. And it is adding a 4 p.m. weekday newscast on Monday.
After owning WJW for about a decade, News Corp. — the parent company of Fox television properties — decided in 2007 to sell it and eight other stations. The move rid News Corp. of many of its smaller-market stations and ones in markets where it did not own two stations. In addition, some reports noted that the company was gathering cash for its bid for Dow Jones & Co. News Corp. acquired the company, which included the Wall Street Journal, later in 2007 for $5.6 billion.
Oak Hill Capital Partners acquired WJW along with seven other News Corp. stations in 2008 for a reported $1.1 billion.
Greg Easterly, general manager of WJW, declined comment Monday on the Tribune deal, instead referring a reporter to officials at Tribune. A Tribune spokesman declined to speculate on what the deal would mean to management and staffing at WJW, saying the deal was not done yet. The company hopes to complete the purchase of the stations by late 2013.
The deal, which reduces Tribune’s overall reliance on newspapers for revenue, offers a wider audience to advertisers and gives the company an edge in talks with cable and satellite carriers, who pay to distribute local channels on their networks. Including Gannett Co.’s agreement to buy Belo Corp. for $1.5 billion, the industry saw $3.2 billion in deals last quarter, the biggest since 2007.
“Television is hot,” said Ed Atorino, an analyst at Benchmark Co. in New York. “Right now these companies want to get bigger.” Tribune’s acquisition is the largest takeover of a broadcast-TV company since a group led by Haim Saban acquired Spanish-language broadcaster Univision Communications Inc. for $12.3 billion in 2007.
Beacon Journal staff writer Rich Heldenfels contributed to this report.