SBG To Buy Barrington TV Stations; Steve Pruett to Join as COO of Chesapeake TV
02.28.2013
Press Release
Contact: David Amy, EVP & CFO, Sinclair
Lucy Rutishauser, VP & Treasurer, Sinclair
(410) 568-1500
SINCLAIR BROADCAST GROUP ANNOUNCES AGREEMENT TO PURCHASE BARRINGTON TV STATIONS; STEVEN PRUETT TO BE NAMED CHIEF OPERATING OFFICER OF CHESAPEAKE TV SUBSIDIARY
BALTIMORE (February 28, 2013) — Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) (the Company or Sinclair ) announced today that it has entered into a definitive agreement to purchase the broadcast assets of 18 television stations owned by Barrington Broadcasting Group, LLC ( Barrington ) for $370.0 million and entered into agreements to operate or provide sales services to another six stations. The 24 stations are located in 15 markets and reach 3.4% of the U.S. TV households. The transaction is subject to approval by the Federal Communications Commission ( FCC ) and antitrust clearance. The Company anticipates the transaction will close and fund in the second quarter of 2013, subject to closing conditions. The Company expects to finance the purchase price, less $20.0 million in deposits, through a bank loan and/or by accessing the capital markets.
This week, we launched our small market television group when we announced we would be acquiring certain of the COX Media television stations, commented David Smith, President and CEO of Sinclair. 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 $71.0 million of cash flow, on average. When combined with the COX stations, we expect our expertise and resources to create approximately $29.0 million in synergistic, incremental cash flow, equating to approximately $232.0 million of added equity value or $2.85 per share.
We are pleased to announce that Steve Pruett will be joining our senior management team as Chief Operating Officer of Chesapeake TV. Steve brings many years of media experience, most recently as Chief Executive Officer of Communications Corporation of America s 25 television station group. Steve will oversee the growth and development of our small market strategy, while Steve Marks will continue as Chief Operating Officer of Sinclair Television Group, overseeing our mid-sized market strategy.
Mr. Pruett, commented, The competitive environment for local affiliate television is changing rapidly. 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.
Mr. Pruett has over 30 years of experience in the broadcast industry with an extensive background in television station finance and management. For the past 10 years, he has been with Communications Corporation of America, first as Chief Financial Officer, then becoming its President in 2006 and President and Chief Executive Officer, as well as a member of the Board, in 2007. Mr. Pruett served as special strategic advisor to DirecTV and Thomson Consumer Electronics from 1998 to 2002. From 1995 to 1999, he was a Managing Director at Communications Equity Associates. During his career, he has helped found several broadcast groups as an initial investor, financier, managing partner or board member including Spanish Radio Group Excel Communications, ACME Television, USBG, and UPI Media, where he served as President. Mr. Pruett attended Southern Illinois University at Edwardsville where he majored in Radio and Television. He later earned a Masters in Management from the JL Kellogg Graduate School of Business at Northwestern University. Since 2008, Mr. Pruett has been a key member of the Fox Affiliate Board of Governors where he served as Treasurer until 2011 when he was elected Chairman, a position he currently holds.
Due to FCC ownership conflict rules, Sinclair will sell its station in Syracuse, NY, WSYT (FOX), and assign its local marketing agreement ( LMA ) and purchase option on WNYS (MNT) in Syracuse, NY. The Company will also sell its station in Peoria, IL, WYZZ (FOX). In addition, the license assets of four stations will be purchased by Cunningham Broadcasting Corporation and Howard Stirk Holdings, a newly formed entity owned and controlled by Armstrong Williams, founder and CEO of boutique communications firm, The Graham Williams Group. In addition to his well-known work as a political commentator, Mr. Williams has spent nearly twenty years developing and producing high quality television programming, including primetime specials with U.S. Supreme Court Justice Clarence Thomas, former Vice President Dick Cheney and Israeli Prime Minister Benjamin Netanyahu. From 2001 to 2003, Mr. Williams served as Chief Operating Officer of the Renaissance Cable TV Network with responsibility for all programming, advertising and content development.
Mr. Smith commented, We are pleased to advance the diversity efforts of the FCC and create a path for minority ownership in the broadcast space through Howard Stirk Holdings.
The Barrington stations covered by the transaction are:
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