Channel 5 Celebrates Anniversary with New Owners
This month KFSM Channel 5 will celebrate 60 years on the air serving the people of northwestern Arkansas and eastern Oklahoma.
This year we will celebrate our anniversary with new ownership.
The Tribune Company announced their purchase of KFSM and KXNW TV Monday (July 1).
When the deal is closed, KFSM and KXNW TV will become part of the country’s largest commercial television station company with 42 stations across the nation.
Thank you for making Channel 5 and 5NEWS part of your daily routine. We look forward to delivering quality programming and accurate local breaking news and weather for many years to come.
Read the full release from Tribune below:
Company Adds 19 Stations in 16 Markets, Making Tribune the #1 Local TV Affiliate Group in America
Tribune Company and Local TV Holdings, LLC, today jointly announced they have entered into a definitive agreement for Tribune to acquire all of Local TV’s 19 television stations in 16 key markets for $2.725 billion in cash. Coupled with Tribune’s current 23 television stations, superstation WGN America, Tribune Studios, Tribune Digital Ventures and its eight major market newspapers, the transaction makes Tribune a multi-platform content and distribution powerhouse. Local TV is principally owned by Oak Hill Capital Partners.
Upon closing, the acquisition will immediately transform Tribune into the country’s largest commercial TV station owner, with a total of 42 stations from New York to Los Angeles and Miami to Seattle. Importantly, because most of Local TV’s stations are ranked #1 or #2 in revenue share in their respective markets, the transaction will generate significant free cash flow and be immediately accretive to Tribune’s earnings.
Tribune’s acquisition of Local TV is a key strategic step, providing Tribune with significant scale to drive its principal business objectives and create substantial shareholder value. The scale provided by the Local TV acquisition will enable Tribune to maximize national and local advertising opportunities and take advantage of a larger footprint, across which it will distribute its video and digital content, especially that created by the recently launched Tribune Studios and Tribune Digital Ventures, as well as its best-in-class journalism. The acquisition will also lead to more meaningful conversations with affiliates about distribution, which is especially important to the future of WGN America. The benefits of the Local TV acquisition will translate into increased cash flow and, ultimately, greater shareholder value.
For Tribune, the transaction will deliver significant advantages, including:
- Providing unparalleled opportunities for delivering compelling news and entertainment to millions of consumers nationwide
- Strengthening local news coverage and programming by adding heritage stations with local news broadcasts consistently ranked #1 or #2 in the morning and evening
- Creating new advertising opportunities in key political battleground states
- Extending the distribution platform for original content generated by Tribune Studios and the digital offerings to be created by Tribune Digital Ventures into new large, growing markets
- Diversifying geographies and network affiliations, including the addition of 7 Fox, 5 CBS, 2 ABC and 2 NBC stations, while strengthening its relationships with cable operators and satellite providers
- Delivering better economies of scale and strategic operating efficiencies
“Since joining Tribune in early 2013, we have been setting the strategic foundation to transform Tribune and help chart the path forward—building our multimedia capabilities and asset portfolio to become the country’s leading independent content creator and distributor,” said Peter Liguori, Tribune’s President and Chief Executive Officer. “This is a transformational acquisition for Tribune—it makes us the #1 local TV affiliate group in America, expands the distribution platform for our high-quality video content, and extends the reach of our digital products to new audiences across the country. We couldn’t be more excited about Tribune’s future as America’s leader in creating and distributing original content and local news programming.”
Bobby Lawrence, Chief Executive Officer of Local TV, said, “Local TV and Tribune have had a long, successful relationship over the last five years. Our cultures and operating philosophies are very similar, and we share a strong commitment to news and local programming excellence. My management team will dearly miss working with some of the most talented and dedicated people in broadcasting, but we know we leave our employees in good hands. I am grateful to our partners at Oak Hill Capital, who acquired the finest stations in the industry and helped us build this great company.”
Jonathan Friesel and Benjamin Diesbach, Partners at Oak Hill Capital, jointly said, “We thank Bobby, President and COO Pam Taylor, and the entire Local TV family for their outstanding dedication and performance. During our partnership together, Local TV has delivered extraordinary growth and become a world-class broadcaster known for its quality programming, technological innovation and strong community service. We wish Tribune well as they build on the history of success these stations have.”
Tribune’s broadcast portfolio will increase from 23 to 42 stations, and include 14 CW affiliates, 14 Fox affiliates, 5 CBS affiliates, 3 ABC affiliates, 2 NBC affiliates and 4 independents. Tribune will own 14 stations in the country’s top 20 markets. It will become the #1 Fox affiliate group, expand its position as the #1 CW affiliate group, and add market-leading stations in prime cities such as Denver, Cleveland, St. Louis, Kansas City, Salt Lake City and Milwaukee.
Tribune anticipates the combination with Local TV will generate more than $100 million in annual run-rate synergies within five years after closing. The transaction will be structured to deliver to Tribune a step-up in the tax basis of the acquired assets. Taking into account Tribune’s estimate of run-rate synergies and the present value of this tax asset, the effective purchase price multiple on a pro forma basis is approximately 7x 2011 and 2012 average EBITDA.
Tribune has received committed financing of up to $4.1 billion from JPMorgan Chase, BofA Merrill Lynch, Citigroup, Deutsche Bank and Credit Suisse, including a new $300 million revolving credit facility and the capacity to allow Tribune to refinance its existing debt. Tribune will finance the transaction through a combination of debt financing and a portion of its cash on hand. Read more.